2022 may be shaping up to be the year of the stock split. Alphabet likely kicked off the latest round of split actions when it revealed in February that it would carry out a 20-for-1 stock split, which then triggered significant valuation gains and prompted calls for other companies with large, pure-dollar share prices to follow suit.

Not long after, Amazon (AMZN -0.15%) announced that it would be carrying out its own 20-for-1 stock split, and then news emerged that Tesla (TSLA 3.87%) also has plans to conduct another split. So, which of these two companies looks like the better buy ahead of impending splits? Buckle your seatbelt and order a copy of the 1986 cult-classic movie Highlander on one-day delivery, because as the film's characters emphasize, "there can be only one."

A hundred-dollar bill under a puzzle with a missing piece.

Image source: Getty Images.

Retail investors have gone gaga for Tesla stock splits

Breaking down their respective stocks into multiple shares representing equivalent value won't do anything to increase the intrinsic value of Amazon or Tesla as companies, but there's recently been a clear trend of lower pure-dollar share prices leading to a surge in buying activity among retail investors. Perhaps no company better exemplifies this trend than Tesla. 

Tesla carried out a 5-for-1 stock split back in 2020 that corresponded with an 80% increase in the company's share price from the time the move was announced on Aug. 11 to the time that it was completed on Aug. 31. While steep sell-offs for growth-dependent stocks have recently pressured the electric vehicle (EV) leader's valuation, a filing with the U.S. Securities and Exchange Commission (SEC) last March revealing the electric-vehicle leader's plan to conduct another split quickly powered more share price gains. 

Tesla's stock price has soared 273% since the announcement of its last stock split, and its market capitalization has more than quadrupled across the stretch. While stellar business performance has been the more significant catalyst for the gains, the company's latest move (specific details are still pending) to split its stock appears to have increased investor enthusiasm, and it wouldn't be surprising to see the EV company's share price get another boost following its next split. However, that doesn't necessarily mean Tesla is the better buy. 

Amazon has an absolutely incredible growth engine

Amazon dominates the online retail space, but that's not even the most exciting part of the company. Amazon Web Services (AWS) spearheaded the evolution of the cloud infrastructure service industry, and it's maintained a forefront position even amid strong competition from Microsoft's Azure -- and to a lesser extent, Google Cloud. 

A chart showing Amazon's Cloud market share at the end of 2021.

Last year, AWS grew sales 37% and posted an impressive 30% operating-income margin. Amazon Web Services provides the backbone for much of the modern internet, and it positions the company to be one of the biggest winners of the ongoing evolution of the digital age.

In addition to its category-leading e-commerce and cloud services businesses, the company has a fast-growing digital-advertising unit and forefront positions in emerging technology trends including artificial intelligence and robotics. With fantastic individual business pillars and synergies across its initiatives, Amazon looks incredibly well-positioned to win the future. 

So, which is the better buy?

Betting against Tesla has been a losing proposition time and time again, but I think Amazon stock looks like a much better buy at current prices. The automotive industry is intensely competitive and relatively low margin given how capital intensive it is. Tesla's growth opportunities aren't limited to hardware sales, and the company will likely be able to drive significant growth from its battery technology and autonomous vehicle software over the long term, but I believe Amazon is the better business. 

The core area of the e-commerce industry Amazon operates in is also highly capital intensive and relatively low margin, but AWS is a cash-generating machine, and the online-retail and cloud-services leader looks harder to disrupt. Taking valuation metrics, the comparable scopes of the businesses, and growth opportunities into account, I think Amazon has much more room for appreciation valued at roughly $1.6 trillion than Tesla does valued at roughly $1.1 trillion. 

TSLA PS Ratio (Forward) Chart

TSLA PS Ratio (Forward) data by YCharts

Tesla is clearly a different kind of automotive company. Licensing, or otherwise monetizing, its battery and self-driving technologies should open the door for the company to enjoy revenue streams that sport much higher margins compared to vehicle sales, but the combination of Amazon's competitive positioning, expansion opportunities, and valuation looks more appealing to me. 

In the short term, I wouldn't be shocked to see Tesla get a bigger split-driven pop. However, I think Amazon is the better long-term buy -- and it could enjoy some strong, split-driven momentum of its own.