Amazon vs. Nike: Which 1 Will Dominate the Next Decade?
Key Points
Nike continues to struggle to drive revenue and profit growth as it has a lot of work to do to turn things around.
Amazon dominates its end markets, and earnings are set to increase at double-digit rates.
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Amazon (NASDAQ: AMZN) has been a wonderful investment. In the past decade, its shares have soared 664%. Nike, on the other hand, is in the midst of a major turnaround effort. The apparel stock trades a gut-wrenching 64% below its peak from November 2021.
Between these two consumer-facing businesses, which one will dominate over the next decade?
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Image source: Amazon.
Nike continues to struggle
It could be a while until Nike gets back on stronger footing. The sportswear giant reported a small revenue gain of 1% in its fiscal 2026 second quarter (ended Nov. 30). However, net income tanked 32%.
Management is trying hard to correct the mistakes that the previous leadership team made, with focus areas including product innovation, distribution, and brand strength.
Amazon operates from a position of strength
Investors looking for the best place to park their hard-earned savings over the coming 10 years should choose Amazon. The company continues to dominate the markets it serves, like online shopping, cloud computing, and digital advertising. Plus, its durable competitive advantages support its ability to keep rivals at bay.
According to Wall Street's consensus analyst estimates, Amazon's earnings per share (EPS) are projected to increase at a compound annual rate of 16% between 2025 and 2027. It wouldn't be surprising to see double-digit gains after this forecast period.
What's more, the current enterprise-value (EV) to earnings-before-interest-and-taxes (EBIT) ratio of 31.9 is near a decade low. This means that rising profits and valuation expansion could be two key tailwinds that help shareholders over the next decade.
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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Nike. The Motley Fool has a disclosure policy.
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