why is apple stock lower than amazon

Purely from a valuation standpoint, it's clear that Apple has less growth priced in than Amazon – meaning investors looking for value may want to start there. Yet there's a reason investors are bullish on Amazon's growth prospects as the company profits from the pandemic and will likely continue to do so well into the future.

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Is Apple stock better than Amazon stock right now?

Mar 22, 2022 · The problems with Amazon, meanwhile, have more to do with the stock itself—namely, its rich value. AMZN stock currently has a P/E of 45, nearly double AAPL’s value. That chasm between the stocks’ valuations is a good place to start when examining the tale of the fundamental tape for Apple vs. Amazon stock.

Why is Apple stock so expensive?

So effectively one share of Apple is smaller than one share of Amazon.(since number of shares of apple are more than amazon). That makes the price difference. Happy Investing:)

Why is Apple so much more profitable than Amazon?

Purely from a valuation standpoint, it's clear that Apple has less growth priced in than Amazon -- meaning investors looking for value may want to start there. Yet there's a reason investors are...

Is it too late to buy Apple and Amazon stocks?

"Both stocks sell for a premium to the forward P/E on the S&P 500 of 22 times earnings, but Apple sells at 30 times forward earnings and Amazon sells at (around) 60 times forward earnings.

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Is Amazon ecommerce profitable?

Higher inventory, faster turnaround times and pandemic-related protective gear cost Amazon a lot of money. As a result, e-commerce isn't as profitable as investors would like to think.

What is the most important product of Apple?

For Apple, its most important product is the iPhone. The iPhone accounted for 44% of Apple's net sales in the third quarter. With just less than 14% of the global market share, the iPhone is still a dominant smartphone powerhouse despite the fact that sales have been slowly falling over the last few years. Yet all is not lost for Apple, ...

How much of Amazon's sales will be in 2020?

Last quarter, the company reported a 40% year-over-year increase in sales of $88.9 billion as its e-commerce revenue grew a whopping 47.8% thanks to increased demand. A 160% increase in online grocery delivery capacity ...

Is AWS profitable?

Most importantly, AWS is profit able; cloud computing made up 12% of Amazon's total revenue last quarter but accounted for 57% of the company's operating income. While revenue growth at AWS has slowed year over year, it will remain a key part of Amazon's overall strategy and the investment thesis for the company.

Who is Mark Reeth?

Mark Reeth is a contributing writer for U.S. News & World Report, where he writes about anything and everything to do with investing. Prior to U.S. News, Mark covered consumer goods, technology, and telecom stocks for The Motley Fool.

What is the most important product of Apple?

For Apple, its most important product is the iPhone. The iPhone accounted for 44% of Apple's net sales in the third quarter. With just less than 14% of the global market share, the iPhone is still a dominant smartphone powerhouse despite the fact that sales have been slowly falling over the last few years. Yet all is not lost for Apple, ...

Is AWS profitable?

AWS provides those companies with cloud services and has continued to enjoy strong demand throughout the pandemic, with revenue in the second quarter growing 29%. Most importantly, AWS is profitable; cloud computing made up 12% of Amazon's total revenue last quarter but accounted for 57% of the company's operating income.

How much of Amazon's sales will be in 2020?

Last quarter, the company reported a 40% year-over-year increase in sales of $88.9 billion as its e-commerce revenue grew a whopping 47.8% thanks to increased demand. A 160% increase in online grocery delivery capacity ...

When is Amazon Prime Day?

This incredible growth in Amazon's main business has investors giddy, and as the pandemic continues, it seems likely that sales will remain elevated – especially with the forthcoming Amazon Prime Day from October 13 to 14 and the subsequent holiday shopping season just around the corner.

Is valuation everything?

Valuation isn't everything – fundamentals matter, and each company has a business model that could very well meet these high expectations. It's impossible to make an exact comparison between Apple and Amazon, but both companies have important portions of their respective businesses that investors need to know more about before making their decision.

Summary

The shares of both companies outperformed the broader indexes over five and ten year periods, but have faltered of late.

Head-To-Head Comparisons

The following chart provides a variety of valuation metrics. The PEG calculated at the 5 year expected rate.

AAPL And AMZN Stock Price

Shares of Apple trade for $127.45. The average 12 month price target of 34 analysts is $149.15. The price target of 15 analysts that rated the stock since the last earnings report is $159.35, approximately 25% above today’s valuation.

Amazon or Apple: Which Stock is the Better Investment?

Both companies have avenues for growth. Furthermore, each company is venturing into, or reinforcing, growth initiatives in arenas that provide robust profit margins.

Is Amazon an e-commerce company?

Amazon isn't just an e-commerce powerhouse. It's built an incredible cloud technology business called Amazon Web Services (AWS). Today, that segment makes up only 12% of the most recent quarter's revenue, but it makes up most (69%) of its operating income. This profit center helps offset losses in its fulfillment segments and lets the company continue to invest in its distribution infrastructure to maintain its e-commerce leadership position.

Is Amazon a powerhouse?

Amazon isn't just an e-commerce powerhouse. It's built an incredible cloud technology business called Amazon Web Services (AWS). Today, that segment makes up only 12% of the most recent quarter's revenue, but it makes up most (69%) of its operating income.

Who is John Mackey?

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors.

Is Amazon stock cheaper than Apple?

Amazon stock is 40% cheaper than Apple (NASDAQ: AAPL) and 55% cheaper than Facebook (NASDAQ: FB) from that perspective. They have proven to Wall Street that they can dial up the profits at the drop of a hat. For now they choose to continue pursuing the growth path.

Why was Amazon a disaster in 2020?

On the one hand, there is no shortage of corporate suffering, and on the other we have Amazon (NASDAQ: AMZN ). Because of the quarantine, demand for its services exploded. Consequently, while the markets suffered, Amazon stock rallied to new highs. Investors in it are flush with profits and they are not relenting.

Was 2020 a disaster?

2020 was a disaster on a human level because millions are suffering from Covid-19. But it also saw the death of many businesses. On the one hand, there is no shortage of corporate suffering, and on the other we have Amazon (NASDAQ: AMZN ). Because of the quarantine, demand for its services exploded. Consequently, while the markets suffered, Amazon ...

Is Apple the most valuable company in the world?

It's true , Apple is the largest, most valuable company the world has ever known . With a bump of just 10%, it would become the history's first trillion-dollar organization. But while the law of large numbers does make sense on paper, Apple's not so big compared to its peers that it should necessitate such a discount.

Is Apple growing fast?

Apple isn't growing as fast as the other three. But while these make sense on the surface level, I simply don't think they explain the heart of the matter. There's only one plausible explanation: Apple's moat is nowhere near as wide as those of the other three, and the market knows it.

Who is Brian Stoffel?

Author Bio. Brian Stoffel has been a Fool since 2008, and a financial journalist for The Motley Fool since 2010. He tends to follow the investment strategies of Fool co-founder David Gardner, looking for the most innovative companies driving positive change for the future.

Is Brian Stoffel a Fool?

Brian Stoffel has been a Fool since 2008, and a financial journalist for The Motley Fool since 2010. He tends to follow the investment strategies of Fool co-founder David Gardner, looking for the most innovative companies driving positive change for the future.

What is a moat in business?

In the simplest sense, a moat is what keeps customers (or users) coming back to a single company year after year, and holding the competition at bay for decades. There are four key types of economic moats, and while each company has elements of multiple moats in its business model, a single moat dominates.

What is a moat?

In the simplest sense, a moat is what keeps customers (or users) coming back to a single company year after year, and holding the competition at bay for decades. Image source: Getty Images.