Amazon (AMZN +2.21%) has, over the last decade or so, experienced a rather enthusiastic upward trajectory, increasing in value by approximately 629% (a figure which, when considered in relation to the vastness of space, is simultaneously significant and utterly inconsequential). Its annual return rate has averaged around 22%, which, statistically speaking, is not entirely unexpected. It is generally considered, by those who consider such things, to be a disruptive force. (Disruption, of course, is a relative term. A mildly irritating cough is disruptive, but not in the same way as, say, the heat death of the universe.)
Apple (AAPL +1.04%), meanwhile, has managed an even more impressive climb, increasing in value by 878% during the same period, with an annual return of 25.6%. It has also, for a considerable time, been a favored holding of Berkshire Hathaway, which, as far as investment vehicles go, is rather like a very large, very patient tortoise.
The question, therefore, is this: which of these two titans of technological…stuff…is the marginally less improbable investment at this particular juncture in the spacetime continuum?
Amazon: Fighting for AI Dominance (and Losing to Paperclips)
Amazon initially made its name by efficiently moving boxes around. This, it turns out, is a surprisingly effective business model. Today, it controls roughly 40% of the online shopping market in the U.S. (a figure that, if extrapolated to the entire planet, would result in a very large number of boxes).
However, it has also diversified into cloud computing, a field which, to the uninitiated, sounds suspiciously like storing data in the sky. Its Amazon Web Services (AWS) division generated $129 billion in revenue and $46 billion in operating income in the last quarter (a sum that, if converted into paperclips, would encircle the Earth approximately 3.7 times – a calculation we felt was vitally important). This, it is believed, will continue to be a source of revenue.
AWS is, essentially, Amazon’s attempt to conquer the field of artificial intelligence. It offers a wide range of AI tools to businesses (mostly involving algorithms and data – the precise details of which are, understandably, shrouded in mystery). Demand has been strong, largely because businesses are terrified of being left behind (a perfectly rational fear, given the potential for AI to replace middle management). CEO Andy Jassy has declared that “Customers really want AWS for core and AI workloads” – a statement that, while not entirely unexpected, is nonetheless reassuring. This, in turn, justifies a robust $200 billion spending plan (which, when considered in relation to the national debt of several small countries, is…significant).
Apple: Still Selling Shiny Things
Apple remains remarkably adept at convincing people to purchase beautifully designed, and often unnecessarily expensive, gadgets. The iPhone, despite being nearly two decades old, continues to thrive, reporting year-over-year revenue growth of 23% (a figure that suggests either remarkable innovation or an exceptionally effective marketing campaign). It is, in the opinion of many, the most important hardware device in the age of AI (which, ironically, may eventually render hardware obsolete – a paradox that should not be pondered for too long).
There are now over 2.5 billion active Apple devices in use around the world (a figure that, if each device were a small, sentient robot, would constitute a significant threat to humanity – but let’s not dwell on that). This provides Apple with an unparalleled distribution network (and a frightening amount of data).
This, in turn, fuels its services division, which has seen revenue jump 44% in the last three years. The segment boasts a gross margin of 77% (a figure that suggests Apple is exceptionally good at extracting value from its customers – or, perhaps, that its accountants are exceptionally clever). It also reinforces Apple’s powerful ecosystem, which encourages customer loyalty (and a degree of inescapable dependence).
If You Insist on Beating the Market…
Apple shares are currently more expensive, trading at a price-to-earnings (P/E) ratio of 32.3. Amazon’s P/E multiple of 29.3 represents a discount (a small one, admittedly, but a discount nonetheless). This is one reason why the e-commerce and cloud computing giant is the marginally less improbable investment option.
The trajectory of the bottom line is the other reason. Amazon’s earnings per share are projected to grow at a compound annual rate of 18% between 2025 and 2028. This is significantly faster than Apple’s projected rate of 11.4% (which, while respectable, is not quite as…enthusiastic).
Therefore, investors who purchase Amazon today are, statistically speaking, setting themselves up for marginally larger returns. (Although, of course, the universe is fundamentally chaotic, and anything could happen. A rogue asteroid, a sudden shift in consumer preferences, the discovery of a faster-than-light travel method – the possibilities are, quite literally, infinite.)
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2026-03-16 22:34