Investing $20,000 in Apple Stock 10 Years Ago Paid Off More Than Investing the Same Amount in Amazon. Here's the Better Buy for the Next Decade.

Long-time Apple (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN) shareholders have undoubtedly been pleased with the stocks' performance. Apple has a market cap of $4.9 trillion, and Amazon's market cap equals $2.8 trillion, as of Sept. 11. They have grown to become among the most valuable companies in the world.

In fact, a $20,000 investment in Apple shares 10 years ago would have grown to $277,000, including dividends. That same amount invested in Amazon stock would be worth $133,000.

However, past success doesn't guarantee future results, of course. Which company's stock looks poised to do better over the next decade? It's time to look at each company's fundamentals before making the investment decision.

Image source: Getty Images.

Apple's fundamentals

Apple has a new CEO, John Ternus, who replaced Tim Cook on Sept. 1. Ternus was the company's senior vice president of hardware engineering.

This coincides with Apple's launch of its iPhone Duo. The new phone is foldable and has features such as a bigger screen and enhanced camera functions. It has a hefty $2,000 price tag, but that's in line with other foldable phones.

Ternus needs the iPhone to succeed since the product generates most of Apple's sales. For the first three quarters of the fiscal year (ended June 27), iPhone accounted for 54% of the company's top line. During the period, the product's sales grew a healthy 22.4% year over year.

The higher-margin services business, which includes advertising, product support, the App Store, and payment services, continues to grow. Over the nine-month period, the category's sales increased 14% versus a year ago to $91.7 billion.

These two businesses helped drive Apple's third-quarter sales 16% higher to $109.4 billion.

However, while Apple has been able to produce new versions of its iPhone, it hasn't had much innovation outside of this product. For instance, the company abandoned its self-driving car efforts a couple of years ago. And its hyped Vision Pro product never really found commercial success.

Amazon's fundamentals

People may know Amazon for its online marketplace. But the company has become so much more than that. It also has physical stores, devices (e.g., Ring), Prime (which includes a streaming service), advertising, and Amazon Web Services (AWS), its cloud-computing business.

This may sound too sprawling, but all of its segments continue to do well. Amazon's second-quarter sales grew 20% compared to a year ago to $200.6 billion, and operating income increased 43.2% to $27.5 billion. The North America, international, and AWS businesses saw sales growth of 16%, 15%, and 37%, respectively.

AWS remains a major profit engine. Its quarterly operating income grew 63.6% to $16.6 billion. That accounted for 60.5% of the company's profit.

The high-margin AWS business, which has been growing rapidly, continues to have strong long-term products. Organizations clamor for data and computing, and the segment's products and services will only see higher demand as they adopt generative artificial intelligence.

Management continues to invest heavily to meet surging demand, including $220 billion in expected capital expenditures this year. That's a significant increase from 2025's $131.8 billion.

Which one presents the better opportunity?

Under Ternus' leadership, I believe Apple will need to come to market with innovative products that consumers want to drive long-term sales growth. The company's iPhone and services business continues to do well, but it needs to broaden its product lineup to drive long-term growth that rewards shareholders.

Meanwhile, Amazon's AWS has a big growth opportunity ahead. Some investors have been concerned about management's decision to quickly ramp up spending. But that's to meet demand and support a long-term growth opportunity. I think the company needs to make the investment to maintain its lead and competitive edge in the business.

With AWS leading the way, I believe Amazon's stock is poised to create more wealth than Apple's shares.

Lawrence Rothman, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Apple. The Motley Fool has a disclosure policy.