Core Viewpoint - Amazon is positioned to surpass Apple in market capitalization over the next five years due to superior growth rates and profit margins driven by its business segments [1][2]. Business Units and Growth Drivers - Amazon's growth is primarily driven by two business units: Amazon Web Services (AWS) and advertising services, rather than its online store [4]. - AWS generated nearly $31 billion in revenue in Q2, growing 17% year over year, despite facing strong competition from Microsoft Azure and Google Cloud [6][7]. - The advertising services segment is Amazon's fastest-growing area, with revenue increasing by 23% year over year, indicating a strong demand for advertising on its platform [8][9]. Profit Growth and Margins - Amazon's operating income rose 31% year over year in Q2, significantly outpacing Apple's 11% increase in operating income for Q3 FY 2025 [11]. - The growth of high-margin businesses like AWS and advertising services has contributed to rising profit margins for Amazon, positioning it for substantial profit growth over the next five years [10][11]. Market Position and Future Outlook - Analysts expect Amazon's profit growth rate to be much faster than Apple's, with projections indicating a 271% increase in operating income over five years for Amazon compared to a 69% increase for Apple [11]. - This trajectory suggests that Amazon could surpass Apple in size, making it an attractive stock pick for investors [12].
1 Brilliant Artificial Intelligence (AI) Stock That Will Be Worth More Than Apple by 2030