Amazon (AMZN) and Apple (AAPL) are two of the world’s most powerful companies, with each controlling large portions of the global economy. 

Owing to its success in consumer electronics and services, Apple’s market capitalization has surpassed $3 trillion. Amazon is the king of e-commerce and a major player in cloud computing through its Amazon Web Services (AWS) segment. Amazon currently has a market capitalization of $2.2 trillion.

Five months into 2025, Amazon stock is down 5.2% year to date, while Apple stock is down 19.9%, compared to a 1% gain in the broader market. As artificial intelligence (AI) continues to reshape business, consumer behavior, and digital infrastructure, the question often arises whether Amazon will surpass Apple in market value within the next five years. Let's look at the key drivers for Amazon and see if there is a possibility.

Diversified Business Is Amazon’s Strength

At first glance, with its high margins, massive ecosystem, brand loyalty, and consistent free cash flow, Apple appears far ahead. However, Amazon is no longer merely an online store. It is a leading innovator in retail, cloud computing, media, AI, and logistics. 

Amazon has kicked off 2025 with resounding momentum across its diverse revenue streams, including retail, AWS, and advertising. AWS revenue increased by 17% year over year in Q1, reaching $117 billion on an annualized basis. New contracts with major corporations including Adobe (ADBE), Uber (UBER), Nasdaq (NDAQ), GE Vernova (GEV), NextEra Energy (NEE), and Publicis Sapient, cement AWS’s dominance in the cloud infrastructure space. During the Q1 earnings call, CEO Andy Jassy hinted that AWS, which was once expected to be a “multihundred billion dollar business,” may now surpass that due to AI’s explosive growth.

Total revenue rose 9% to $155.7 billion, with adjusted earnings up 62.2% to $1.59 per share. Amazon’s core retail business remained resilient in the first quarter, with revenue in North America and International rising 8% each. While growth in Amazon’s core retail business has slowed, it is far from over. International expansion, particularly in India, Brazil, and the Middle East, provides new growth opportunities. 

Furthermore, advertising is Amazon’s goldmine. Its advertising business is extremely profitable and expanding faster than any other division. Ad revenue reached $13.9 billion in the first quarter, a 19% increase over the previous year. As AWS and advertising grow in popularity, Amazon’s profitability may rival Apple’s, particularly if e-commerce efficiency improves. According to management, Amazon has yet to see demand soften as a result of tariff threats. Amazon believes that due to its vast SKU variety (hundreds of millions) and global seller network, it is better positioned than most to navigate tariff-induced shocks.

Artificial Intelligence Is Amazon’s Big Bet

The AI race is transforming Big Tech valuations. While Nvidia (NVDA) and Microsoft (MSFT) currently lead in monetizing AI, Amazon is making significant investments to close the gap. Capital expenditures in the quarter totaled $24.3 billion, with the majority going toward AWS infrastructure, fulfillment, and transportation improvements, as well as robotics and automation.

AWS offers Bedrock (foundational model hosting) and Trainium chips (custom AI training chips). In its retail business, Amazon is using generative AI to improve product recommendations, automate customer service, and streamline logistics.  Furthermore, Amazon is reimagining Alexa with generative AI to enable more natural interactions and smart home integration. Alexa Plus is Amazon’s next-generation voice assistant. Beyond commerce and AI, Amazon is expanding into entertainment and space technology with Project Kuiper, the company’s satellite internet initiative.

Despite the heavy investments, Amazon’s trailing-12-month free cash flow stood at $25.9 billion in Q1. The company also ended the quarter with $82.3 billion in cash, cash equivalents, and restricted cash, while maintaining a low debt level (debt-equity ratio of 0.17x). 

For the second quarter, Amazon expects revenue in the range of $159 billion and $164 billion. Analysts predict that Amazon’s earnings will increase by 12% in 2025.

Is AMZN Stock a Buy on Wall Street Now?

Overall, Amazon stock has earned a “Strong Buy” rating.  Of the 53 analysts covering the stock, 45 have given it a “Strong Buy” rating, six recommend a “Moderate Buy,” and two have a “Hold” rating. The average target price is $241.10, indicating potential upside of 16.4% from its current price. Additionally, the highest target price of $305 suggests the stock could rise by as much as 47.1% over the next 12 months.

The Verdict

From an investment standpoint, both Apple and Amazon stocks are solid long-term bets that could fit into a balanced portfolio. 

Apple stock offers stability, dividends, and predictable cash flow. However, investors betting on disruptive innovation may find Amazon to have more leverage over the next five years as it offers growth, diversification, and upside from cloud, AI, and global commerce.