In this piece, I evaluated two big tech stocks, Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL), using TipRanks’ comparison tool to determine which is better. Of course, Amazon and Apple need no introduction. Amazon has exploded 34% year-to-date, bringing its one-year return to 3.5%. Meanwhile, Apple is up 38.7% year-to-date and 21% over the last year. Notably, Apple is trading close to its record high, while Amazon is significantly off its all-time high.
Technology stocks have been broadly outperforming those in other sectors. Although tech names make up several of the highest-weighted names in the S&P 500 (SPX), it has gained about 8% year-to-date versus the tech-heavy Nasdaq’s (NDX) 26% year-to-date gain. Thus, investors might be wondering whether there’s any near-term upside left, so a closer look is in order.
Amazon has faced some issues recently that may be restraining its stock. However, given its long-term stability, a bullish view looks appropriate, as the current restraints on its stock price appear to have created a nice entry point for investors.
It’s long been a challenge to estimate Amazon’s valuation because it has so many moving parts. In addition to the e-commerce business the company is so well-known for, it also has recurring revenue in the form of Prime subscriptions.
Additionally, the Amazon Web Services platform serves numerous companies. Amazon also has its own devices and other branded products for sale on its platform and is developing various technologies, including Alexa, its digital assistant backed by artificial intelligence.
Notably, hedge funds unloaded 10 million shares of Amazon in the last quarter, which is one driver of the sell-off. Still, the company’s Retail segment generated $343 million in operating losses for the first quarter, a massive improvement from the $2.85 billion it lost in the year-ago quarter. Amazon Web Services continues to generate Amazon’s profits, although its operating expenses have risen, just as they have at other tech companies.
Amazon’s net income margin fell into the red for 2022, at -0.5%, but it began to recover in the first quarter, coming in at 0.8% for the last 12 months. As things stand now, it looks like Amazon is starting to recover, which is why its stock is up so much year-to-date. However, it looks like there will be more room to run in the near term.
Even if Amazon shares stagnate temporarily, I believe that…
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