Apple(AAPL) The Motley Fool·2025-05-17 08:35Core Viewpoint - Apple is facing challenges as its stock performance stagnates, while competitors like Nvidia and Microsoft are growing faster, leading to a potential shift in market capitalization rankings with Amazon likely to surpass Apple by the end of 2025 [1][2]. Revenue Growth Comparison - Amazon has achieved a 102% revenue growth over the last five years, significantly outpacing Apple's 46% growth, which was primarily driven by a post-pandemic surge [4]. - In the last 12 months, Amazon generated 400 billion, indicating Amazon's stronger growth trajectory [4]. Market Dynamics - Amazon operates in two large addressable markets: e-commerce and cloud computing, which are expected to drive further growth, especially as online shopping continues to gain market share [6]. - The cloud computing segment, Amazon Web Services (AWS), has seen a 17% year-over-year revenue growth, benefiting from advancements in artificial intelligence [6]. Profit Margin Analysis - Amazon is positioned to expand its profit margins more easily than Apple, which may face challenges due to tariff costs and potential legal issues [8]. - Apple's operating margins are currently at 32%, while Amazon's are at 11%, but the market is likely to favor Amazon's operating leverage potential moving forward [8]. Legal Challenges for Apple - Apple faces potential revenue loss from lawsuits related to its default search engine payment and App Store fees, which could significantly impact its annual operating income of 127 billion) and Amazon ($72 billion) is expected to narrow, potentially leading to a higher market valuation for Amazon by the end of 2025 [14].