Best Stock to Buy Right Now: Apple vs. Amazon

The "Magnificent Seven" are giants of the stock market, and among them, Apple (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN) stand out as preeminent consumer companies. Both have delivered high-tech advances over the years.

But if you had to choose between them, would Apple or Amazon be the better investment for the long run? A deciding factor between future prosperity or obsolescence could lie in how each tackles the latest technological innovation: artificial intelligence (AI).

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Amazon CEO Andy Jassy sees the rise of AI as a watershed moment: "Generative AI is going to reinvent virtually every customer experience we know, and enable altogether new ones about which we've only fantasized."

Here's an examination of Apple and Amazon's approaches to this transformative technology, in order to identify the superior long-term investment.

Image source: Getty Images.

Apple's approach to AI

Apple seemed to take an early lead in AI with the arrival of digital assistant Siri on the iPhone in 2011. Since then, the company has chosen to partner rather than invest in the costly infrastructure needed for AI systems. For instance, Apple used Alphabet-owned Google's custom semiconductor chips to train its AI software, and integrated OpenAI's ChatGPT to supplement Siri.

As a result, Apple has been accused of falling behind its rivals in the AI race. The accusations have some merit. At Apple's Worldwide Developers Conference in June, the company announced its latest AI updates, such as real-time translation services. Its new AI capabilities were underwhelming, while meaningful updates to its proprietary Apple Intelligence aren't expected until 2026.

However, AI's evolution is a marathon, not a sprint. Industry forecasts estimate the AI market will expand from $244 billion in 2025 to $1 trillion by 2031. There's time for Apple to capitalize on the sector's growth, so the company's slow AI progress isn't a death knell.

Moreover, Apple could acquire an AI business to give it the ability to rapidly catch up to competitors. After all, Siri was developed by another company before Apple bought the technology.

In addition, Apple's devoted customer base is a strength here. Loyal consumers are likely to wait for more robust AI features.

The company's ability to keep customers coming back for more translated into sales of its iconic iPhone remaining above $200 billion for the past three years. Despite sparse AI features, Apple looks likely to repeat the feat: iPhone sales in its current fiscal year's first half, which ended March 29, totaled $116 billion compared to the prior year's $115.7 billion.

Amazon's AI achievements

Amazon's AI approach has been to go all in on the technology. In the first quarter of 2025, the company spent $24.3 billion on capital expenditures (capex), primarily to build up tech infrastructure. This included its Amazon Web Services (AWS), the global leader in cloud computing. Contrast this to Apple's fiscal Q2 capex of about $6 billion.

Those AI investments led to AWS sales growing 17% year over year to $29.3 billion. But the long-term payoff is poised to be far bigger, given Amazon's slew of AI enhancements.

This year the company released Alexa+, the next evolution of Siri's rival. Amazon also uses AI to manage a fleet of more than 750,000 robot workers in its warehouses, and to drive the vehicles for its new robotaxi service, Zoox, which arrives in select cities this year.

Amazon's AI capabilities help it smartly adjust prices across its vast universe of products, taking into account numerous factors from inventory levels to individual shopper behaviors. This helped Amazon grow Q1 sales by 9% year over year to $155.7 billion.

That's just the start. Amazon sees AI as a game changer, and Andy Jassy said: "That's why there are more than 1,000 GenAI applications being built across Amazon."

Making the call between Apple and Amazon

Apple and Amazon both have unique strengths. But does the disparity in their AI abilities tilt the odds in one company's favor? I believe Apple has the potential not only to catch up, but also to deliver groundbreaking products, just as the introduction of its iPhone proved revolutionary for mobile devices.

That said, Amazon is supplying AI capabilities at astonishing speed. As a result, Amazon isn't just improving services for its core e-commerce business, it's tackling entirely new industries, as exemplified by Zoox.

But one other factor to consider is share-price valuation. Here's a look at Apple and Amazon's price-to-earnings (P/E) ratios:

Data by YCharts.

The chart reveals that Amazon's P/E multiple was substantially higher a year ago, but has since dropped, particularly after President Donald Trump's April tariff announcements caused the broader stock market to plunge. Now, it's not too far above Apple's P/E, and given Amazon's AI investments, its higher valuation is arguably warranted.

Taking this and its impressive AI advancements into account, these factors make Amazon the best stock to buy right now over Apple.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Robert Izquierdo has positions in Alphabet, Amazon, and Apple. The Motley Fool has positions in and recommends Alphabet, Amazon, and Apple. The Motley Fool has a disclosure policy.