The success of Amazon (AMZN 1.47%) has drawn competitors and more than that, it has inspired companies trying to run similar businesses in other parts of the world. One of these is Sea Limited (SE 3.03%), an e-commerce conglomerate that operates primarily in Southeast Asia.
Of the two, Amazon is the more established company. Nevertheless, Sea Limited leads the market in an emerging part of the world that holds the potential for considerable growth. Knowing that, should investors buy a larger and more mature company in Amazon, or would investors be better off taking a chance on Sea Limited?
Image source: Getty Images.
The case for Amazon
The strength of Amazon is that it is a known quantity, having pioneered the e-commerce and cloud computing industries.
Although the online sales enterprise only delivers single-digit revenue growth, it bolsters subscription, third-party seller, and digital advertising businesses that deliver double-digit revenue growth. Moreover, Amazon continues to lead the cloud computing industry through AWS, and its artificial intelligence (AI) capabilities have made it even more crucial to its clients.
Cloud computing also delivers the higher profits that fund Amazon's ability to both compete and innovate. In the first nine months of 2025, $33 billion of Amazon's $55 billion in operating income came from AWS despite accounting for just 18% of Amazon's revenue during that period. Also, its net income for that time frame was $56 billion, 44% higher than year-ago levels.
Admittedly, funding that innovation led to $120 billion in capital expenditure (capex) over the last year, which may explain Amazon's tepid stock performance during that time. Still, Amazon generated $15 billion in free cash flow over the last 12 months (a figure that excludes capex), implying that it can afford to invest heavily in innovation.
NASDAQ: AMZN
Key Data Points
Furthermore, its 34 P/E ratio is far below historical levels, pointing to a possible opportunity to buy Amazon stock at a relatively low valuation.
Why investors might consider Sea Limited
At a $2.6 trillion market cap, Amazon has realized much of its growth. Hence, Sea Limited's market cap of $78 billion could make it feel like a second chance at Amazon.
Still, Sea Limited differs in many ways. In addition to its Shopee e-commerce segment, it also offers gaming through its Garena segment, and its fintech arm, Monee, provides digital financial services.
Unlike Amazon, Sea Limited's e-commerce and fintech businesses primarily serve Southeast Asia. Other than Singapore, they do business in developing markets like Thailand, Vietnam, and other countries in that region. While these markets tend to grow quickly, average incomes significantly lag developed countries like the U.S. Also, Shopee competes with Amazon and MercadoLibre in Brazil.
Sea Limited earned almost $1.2 billion in net income in the three quarters of 2025, far above the $207 million profit in the same year-ago period.
Despite that improvement, the aforementioned competition and slow growth in gaming weighed on the stock. The stock is up by nearly 20% over the last year, but it is down by over one-third from its high in September.
NYSE: SE
Key Data Points
Additionally, at a 54 P/E ratio, Sea Limited is not a cheap stock. Still, considering that Amazon sold at a premium for much of its history, such a valuation is unlikely to deter growth investors.
Amazon or Sea Limited?
In the end, each company is in a strong position to outperform the market. That likely means that choosing between the two stocks comes down to an investor's goals and preferences.
For more conservative investors, Amazon is likely a more suitable choice. The company has built a proven track record of success, and its market lead in two crucial industries should continue to bring outsized growth. Risk-averse investors will probably also prefer its lower valuation.
But if an investor is willing to take on more risk, Sea Limited is more likely to be the more rewarding holding for the long term. Indeed, investors must contend with the uncertainties that come with operating in developing markets and pay a valuation premium to do so.
Still, Sea Limited is a small fraction of Amazon's size and is now growing its net income at a rapid clip. Assuming the economic growth continues in its markets, Sea Limited will help drive much of that growth, likely leading to outsized gains in the future.
Ultimately, when choosing between these stocks, investors need to weigh their risk tolerances and invest appropriately.
