Better Stock to Buy Right Now: Amazon vs. Apple

Amazon (NASDAQ: AMZN) shares have soared 629% in the past decade (as of March 13), with an annual average return rate of 22%. The company is widely regarded as one of the most disruptive businesses on Earth, as it has a strong position in many end markets.

Apple's (NASDAQ: AAPL) share price has climbed 878% during the same time period at an average annual return of 25.6%. It has been a top Berkshire Hathaway holding for a long time.

Which of these "Magnificent Seven" stocks is the better one to buy right now?

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Amazon is fighting for AI dominance

Amazon made a name for itself early in its lifecycle by innovating within e-commerce. Today, it sits atop the industry, with roughly 40% of online shopping in the U.S. happening on the company's popular marketplace.

However, the company has been extremely successful in other markets, most notably cloud computing. Its Amazon Web Services (AWS) division generated significant revenue of $129 billion and operating income of $46 billion in the fourth quarter (ended Dec. 31). This segment will drive success in the future.

AWS is Amazon's artificial intelligence (AI) engine. It offers a wide variety of AI tools to enterprise customers. Demand has been strong. CEO Andy Jassy said: "Customers really want AWS for core and AI workloads." This is encouraging management's robust $200 billion spending plan.

Apple's product innovation continues to shine

Apple remains hyper-focused on the area where it excels better than any other business: Product innovation. The company's iPhones reported impressive year-over-year revenue growth of 23% in first-quarter 2026 (ended Dec. 27, 2025). Nearly two decades after its initial release in 2007, this single product line continues to thrive. I believe it will remain the most important hardware device in the age of AI.

There are now over 2.5 billion active Apple devices around the world. This gives the company unparalleled distribution.

That lays the foundation for Apple's services division to flourish. Revenue here jumped 44% in the last three years. The segment carries a superb gross margin of 77%. What's more, it rounds out Apple's powerful ecosystem that supports customer stickiness.

If you're after market-beating returns, the choice is clear

Apple shares are currently more expensive, as they trade at a price-to-earnings (P/E) ratio of 32.3. Amazon's P/E multiple of 29.3 represents a discount. That's one reason why the e-commerce and cloud computing enterprise is the better investment option.

The trajectory of the bottom line is the other reason Amazon wins the battle between these tech heavyweights. Its earnings per share are projected to grow at a compound annual rate of 18% between 2025 and 2028. This is a much faster expected rate than Apple's 11.4%.

Investors who buy Amazon today are setting themselves up for bigger returns.

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Apple, and Berkshire Hathaway and is short shares of Apple. The Motley Fool has a disclosure policy.