Which Is the Best Stock to Buy: Apple or Amazon in 2026?

When investors face the choice between two of the world’s most dominant tech companies, the decision often comes down to understanding their distinct strengths and growth trajectories. Both Apple and Amazon have demonstrated remarkable resilience and expansion over the past decade, but they represent fundamentally different investment opportunities. Choosing the best stock to buy requires looking beyond surface-level performance metrics and examining the underlying drivers of profitability and future growth.

Over the past ten years, Apple shares surged approximately 940%, while Amazon climbed roughly 705%. Yet comparing raw returns alone doesn’t tell the full story. The question isn’t which company has performed better historically, but rather which offers superior returns moving forward.

Apple’s Brand Dominance and Profit Machine

Apple’s competitive advantage rests on a fortress-like brand moat built through decades of superior design, consistent innovation, and an ecosystem that keeps customers engaged. The company has masterfully created what industry observers call a “walled garden”—an integrated experience where hardware, software, and services work seamlessly together, making it difficult for users to switch to competitors.

This brand strength translates into exceptional profitability. Over the past five years, Apple maintained an average net profit margin of approximately 25.5%, among the highest in the technology sector. This means roughly one dollar of every four goes directly to the bottom line—a testament to the company’s pricing power and operational efficiency.

However, growth presents a challenge. With over 2 billion Apple devices already installed worldwide, the market for new hardware has become increasingly saturated. Recent data shows Apple’s revenue expanded at only 1.8% annually between fiscal 2022 and 2025. While new product launches occasionally generate excitement, they haven’t fundamentally disrupted the market the way innovations did in earlier years.

The company is banking on artificial intelligence to reignite growth momentum. Management expects double-digit iPhone sales increases in the first quarter of fiscal 2026, driven by heightened interest in iPhone 17 models. Even if this proves unsustainable, Apple’s robust services division—which includes subscriptions, cloud services, and digital content—should continue generating stable revenue regardless of hardware cycles.

Amazon’s Multi-Front Growth Engine

In contrast, Amazon operates at the intersection of multiple secular growth trends that collectively point toward expanded market opportunity. The company dominates online retail, yet e-commerce still represents only about 16% of total U.S. retail spending, leaving enormous room for expansion.

Beyond consumer shopping, Amazon has positioned itself as a critical infrastructure player in the artificial intelligence revolution through Amazon Web Services (AWS). AWS provides the cloud computing backbone that enables companies to build and deploy their own AI applications. As organizations worldwide race to implement AI solutions, AWS is capturing significant wallet share from enterprise customers seeking proven, scalable infrastructure.

Adding another dimension to growth, Amazon has quietly built a substantial digital advertising business. In the third quarter of 2025, this division generated $17.7 billion in revenue, representing a 24% year-over-year increase. This emerging segment ranks Amazon among the primary players in digital advertising, alongside Google and Meta, opening yet another avenue for margin expansion.

The scale is already enormous—Amazon reported $180 billion in net sales during Q3 2025 alone. Yet analyst consensus projects revenue growth of 11.5% annually through 2027, suggesting the company is far from reaching market saturation. Each business segment—retail, cloud computing, and advertising—is positioned in structurally attractive markets with significant tailwinds.

Evaluating Valuation and Earnings Potential

When comparing valuation metrics, Amazon appears more attractively priced. Apple trades at a forward price-to-earnings (P/E) ratio of 31.4, while Amazon’s multiple sits at 28.7. For investors seeking better value, Amazon offers a modest discount.

More importantly, the earnings growth outlook differs substantially. Apple’s heavy dependence on hardware sales limits its ability to expand net income at accelerating rates. The installed base question looms: once everyone who wants an Apple device owns one, how does the company drive significant profit expansion?

Amazon faces no such constraint. Operating across e-commerce, cloud infrastructure, and advertising—all experiencing rapid secular growth—the company possesses far greater optionality to grow earnings substantially over the next five years. Analysts expect the company to widen profit margins as AWS and advertising scale while benefiting from operating leverage across the entire portfolio.

Making the Right Investment Choice

The data suggests that when seeking the best stock to buy based on forward-looking fundamentals, Amazon presents a more compelling case. It offers superior valuation, operates in faster-growing markets, and possesses multiple levers to drive earnings expansion. Apple, while an excellent business with fortress-like competitive advantages, faces structural limitations that may constrain future growth.

Of course, no single metric determines a stock’s suitability for your portfolio. Your own risk tolerance, investment timeline, and market outlook should guide the decision. But for investors specifically hunting for the best stock to buy right now—one combining reasonable valuation with exceptional growth prospects—Amazon’s diversified growth drivers and market positioning deserve serious consideration.