The “Magnificent Seven,” a term used to describe seven prominent tech companies, faces a challenging year in the stock market. This roster includes Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla, all known for their substantial market capitalizations exceeding $1 trillion and their leadership in innovation and financial performance.
Amazon and Apple, two titans in this group, share significant similarities in their business strategies. Both companies have successfully created expansive ecosystems that provide them with a competitive edge, revolutionizing the e-commerce and telecommunications sectors, respectively. Their efforts to deliver personalized customer experiences have enhanced consumer loyalty.
However, both companies have struggled in 2023, with Amazon and Apple being the weakest performers in the Magnificent Seven. As the fourth quarter of 2025 approaches, investors are weighing the prospects of these industry leaders.
Amazon is widely recognized for its e-commerce platform but is also a major player in cloud computing through its Amazon Web Services (AWS). In the third quarter of 2023, Amazon recorded $167.7 billion in total sales, with $100.1 billion from North America and $36.8 billion internationally, representing respective increases of 11% and 16% from the previous year. Despite strong revenue figures, profit margins remain tight, with operating expenses for its e-commerce segment at $127.8 billion, yielding a mere $9.3 billion in profit.
AWS, on the other hand, showcased a better performance with revenues of $30.8 billion against operating expenses of $20.7 billion, resulting in a profit of $10.16 billion, up from $9.3 billion in the previous year. Holding a 30% share of the global cloud computing market, AWS continues to excel as companies increasingly transition to cloud-based operations.
In terms of valuation, Amazon’s forward price-to-earnings (P/E) ratio stands at 32.8, a decline from over 50 in early 2024, suggesting its stock may be becoming more attractive to investors.
Turning to Apple, the company is synonymous with its flagship product, the iPhone, which remains the largest source of revenue. However, the services segment demonstrates remarkable profitability, generating $27.42 billion in revenue with only $6.7 billion in operating expenses, leading to an impressive margin of over 75%. Apple’s overall revenue for Q3 was $94 billion, reflecting a 10% increase, likely buoyed by improved iPhone sales, although sustained growth remains a concern due to market saturation and competition.
Apple’s stock is also trading with a forward P/E ratio close to 31, showing a similar pricing structure to Amazon.
Both Amazon and Apple remain sound investments and integral members of the Magnificent Seven. Amazon has the edge with a more favorable price-to-sales (P/S) ratio of 3.2 compared to Apple’s 8.3, while Apple offers a modest dividend yield of 0.4%.
For investors looking toward growth, Amazon stands out as the preferred choice. Its expanding cloud computing division harbors immense potential, with the market expected to soar from $752.4 billion in 2024 to $2.39 trillion by 2030. This anticipated growth trajectory underpins the argument for Amazon as the superior stock for a long-term investment strategy. As both companies position themselves for the future, the investment landscape remains promising for those invested in innovation and technology.