When it comes to the most dominant businesses on the planet, Apple (AAPL 0.93%) gets a lot of praise. It's second to none in consumer hardware and software design, with products and services that people all over the world love.
Amazon (AMZN +0.40%) deserves some attention as well. It commands significant market share in the e-commerce industry. And it has innovated in other areas in remarkable fashion to get to leading positions.
Apple shares have soared 942% over the trailing 10-year period (as of Jan. 15), while Amazon's shares are up 706% in the past decade. Between these two "Magnificent Seven" stocks, which is the best to buy right now?
Image source: Getty Images.
Apple's strong brand leads to huge profits
Apple's defining trait is its brand moat, which has been developed thanks to a superior user experience, exceptional product quality, ongoing innovation, and pricing power. The business has done an unbelievable job resonating with consumers over time, supporting its competitive position. This has historically translated into immense profits. Apple's net profit margin averaged 25.5% over the last five years.
NASDAQ: AAPL
Key Data Points
The brand also supports customer loyalty, as people occasionally upgrade to Apple's newest devices. What's more, the combination of well-designed products and internal software and services creates a walled garden that keeps people locked in.
However, with an installed base of more than 2 billion products across the globe, there's naturally less of an opportunity to drive meaningful expansion. Apple's revenue increased at a compound annual rate of only 1.8% between fiscal 2022 and fiscal 2025.
Fresh product lineups don't seem to introduce game-changing improvements like they did years ago. But Apple bulls hope that artificial intelligence (AI) can move the needle. The management team expects iPhone sales to grow double-digits in the first quarter of fiscal 2026 (ended in December) due to heightened interest in iPhone 17 models.
Although I don't believe that pace of growth will be durable, it can continue to support impressive revenue gains in the services division.
Amazon is riding numerous secular waves
Amazon might be the ultimate tech stock simply because it's benefiting from many different secular trends. Fast and free shipping, low prices, and a massive product selection put this company atop online shopping, which still only represents 16.4% of total retail spending in the U.S.
NASDAQ: AMZN
Key Data Points
The business is already a leader in the AI competition. Its Amazon Web Services (AWS) segment is the top cloud computing platform, providing products and services that customers utilize to build their own AI capabilities. Executives talked about strong AI demand on the latest earnings call. AWS gives Amazon a critical position at the infrastructure layer of the AI boom.
Investors might not yet realize that Amazon has a burgeoning presence in digital advertising, a division that raked in $17.7 billion in revenue in Q3 2025. That figure was up a notable 24% year over year, and it makes Amazon one of the primary players in this market.
Amazon is a colossal entity; it reported $180 billion in net sales in the third quarter last year. But the company is poised to continue expanding, thanks to the growth markets it operates in. Consensus analyst estimates call for revenue to rise at a compound annual rate of 11.5% between 2024 and 2027.
Looking at valuation and earnings
Apple shares trade at a forward price-to-earnings (P/E) ratio of 31.4. Amazon stock is cheaper, as it trades at a forward P/E multiple of 28.7. On the valuation front, Amazon is the better investment opportunity.
The next factor to think about is earnings growth. Given Apple's huge dependency on hardware sales, its potential to drive profit gains is not on par with Amazon. Amazon operates in the middle of powerful secular trends that give it a higher chance to post much greater net income five years from now. This further hammers home the argument that Amazon is the better stock to buy.
