Back in April 2020, Amazon's (AMZN 3.55%) market cap briefly eclipsed Apple's (AAPL 1.12%). At the time, both tech giants were worth about $1.2 trillion. But today Amazon is still worth $1.2 trillion, while Apple's market cap has roughly doubled to $2.4 trillion. Let's see why Apple pulled so far ahead of Amazon -- and if Amazon can catch up again by 2025.

Why did Amazon pull ahead of Apple?

In early 2020, Amazon seemed like a more appealing investment than Apple. Amazon's e-commerce and cloud businesses were both well-poised to grow throughout the pandemic as brick-and-mortar stores shut down, consumers stayed at home, and people accessed more cloud-based services and apps.

In 2020, Amazon's revenue rose 38% to $386.1 billion, its net income increased 84% to $21.3 billion (even as it racked up billions of dollars in COVID-related expenses), and its earnings per share (EPS) grew 82%. The bullish thesis was simple: Amazon's e-commerce business would continue to expand as it locked in more shoppers with Prime, while the growth of its higher-margin Amazon Web Services (AWS) cloud platform would subsidize the growth of its lower-margin retail businesses.

An Amazon Go store.

Image source: Amazon.

At the time, Apple was still selling 4G iPhones as new 5G Android devices hit the market. It was also losing ground in China to popular domestic smartphone brands like Xiaomi, Oppo, and Vivo. Its own first family of 5G devices, the iPhone 12, wouldn't arrive until late 2020. The trade war also threatened to disrupt its production capabilities in China.

As a result, Apple's revenue only grew 6% to $274.5 billion in fiscal 2020 (which ended in September of that calendar year). Its net income rose 4% to $57.4 billion, while its EPS -- boosted by buybacks -- grew 10%. Those uninspiring numbers suggested that Apple's high-growth days were over, so many investors seemed to favor Amazon over Apple.

Why did Apple pull ahead of Amazon again?

But as the pandemic-related tailwinds faded away, Amazon's growth cooled off against some tough year-over-year comparisons. Yet its revenue still rose 22% to $469.8 billion in 2021, while its net income increased 57% to $33.4 billion and its EPS grew 55%.

Unfortunately, several macro challenges this year will exacerbate Amazon's post-pandemic slowdown. Inflation will curb the spending power of its retail consumers while boosting its marketplace expenses, and macro headwinds will gradually reduce the enterprise market's appetite for its cloud-based services. The resignation of founder and CEO Jeff Bezos last July also strongly indicated that Amazon's growth and valuations had reached a near-term peak.

For 2022, analysts expect Amazon's revenue to rise just 11% as higher investments reduce its net income by a staggering 98%. That jarring slowdown spooked investors, and its stock tumbled 33% this year.

As Amazon's growth cooled, Apple's growth accelerated as it launched the iPhone 12 and expanded its subscription-based services. In fiscal 2021, its revenue jumped 33% to $365.8 billion, its net income grew 65% to $94.7 billion, and its EPS increased 71%. As a result, Apple became an attractive growth stock again as pandemic-era plays burned out.

Analysts expect Apple's revenue and net income to grow 7% and 5%, respectively, in fiscal 2021 as it laps the launch of the iPhone 12. Those stable growth rates -- and the inflation-resistant nature of its affluent customers -- have arguably made it a more appealing stock than Amazon. That's why its stock only dipped 15% this year.

Will the tables turn again by 2025?

Amazon's growth should stabilize after the inflationary and supply chain headwinds dissipate, but investors shouldn't expect it to grow as fast as it did during the pandemic. Between 2021 and 2024, analysts expect its revenue to grow at a compound annual growth rate (CAGR) of 14% as its EPS increases at a CAGR of 6%.

Meanwhile, Apple is widely expected to launch new AR devices over the next few years to diversify its top line away from the iPhone, iPad, and Mac. It's also expected to launch an electric vehicle sometime in the future. It already ended its latest quarter with over 860 million paid subscriptions across its services ecosystem, and that massive walled garden should drive the launches of its future products and services. That roadmap is still murky, but analysts expect Apple's revenue to grow at CAGR of 6% between fiscal 2021 and 2024, while its EPS increases at a CAGR of 8%.

Amazon might generate stronger revenue growth than Apple, but its earnings growth should remain weaker because it operates at much lower margins and spends less cash on buybacks. And at around $120 per share, Amazon actually trades at more than 30 times its projected earnings for 2024. At around $150, Apple trades at just 22 times its 2024 estimate.

Therefore, Amazon's higher multiple could cool off as investors brace for several more years of single-digit earnings growth. Apple's multiple could hold steady -- or even rise -- as it launches new products and services.

I'm not sure exactly where Apple and Amazon will end up by 2025. But based on these facts, it seems highly unlikely that Amazon's market cap will eclipse Apple's within the next three years.