NVIDIA Corporation (NVDA)vs Amazon.com, Inc. (AMZN)

Quick verdict

NVIDIA Corporation (NVDA) and Amazon.com, Inc. (AMZN) appeal to different investors. On our six-factor framework, NVDA scores 5 and AMZN scores 1. NVDA looks cheaper on the multiples that matter, while NVDA grows faster and AMZN earns higher returns on capital. Overall, NVDA edges this comparison, but the right pick depends on whether you prioritise value, growth, income or balance-sheet safety.

2-year relative performance

At-a-glance comparison

Business model and revenue mix

NVIDIA Corporation operates in Semiconductors (Technology), while Amazon.com, Inc. sits in Internet Retail (Consumer Cyclical). The two operate in different sectors, so cyclicality and end-market exposure differ — factor that into any portfolio overlap. NVDA carries a beta of 1.28 versus 1.53 for AMZN, meaning AMZN has historically been the more volatile of the two.

Valuation

On valuation, NVDA is the cheaper stock. NVDA trades on a forward P/E of 10.38 and EV/EBITDA of 24.59, against 45.95 and 32.34 for AMZN. Price-to-sales is 18.21 vs 20.74, and free-cash-flow yield is 4.3% vs 2.0%. A higher multiple is only justified if the company can sustain faster growth or wider margins, which is exactly what the next sections test.

Growth profile

NVDA is the faster grower. NVDA has compounded revenue at 25.5% over three years with EPS growth of 38.2%, while AMZN has delivered 16.9% revenue and 25.7% EPS growth. Growth like this is the single biggest driver of long-term returns, but it also tends to come with a richer valuation, so it must be weighed against the multiples above.

Profitability and quality

On profitability and quality, AMZN is stronger. NVDA posts a 42.9% operating margin, 27.0% return on equity and 20.4% return on invested capital. AMZN posts 45.9%, 26.3% and 17.3% respectively. Return on invested capital above roughly 15% is a hallmark of a durable competitive advantage, so this metric deserves particular attention.

Balance-sheet risk

NVDA has the safer balance sheet. NVDA carries net-debt/EBITDA of -0.17x with a current ratio of 2.18, versus 0.86x and 1.04 for AMZN. Lower leverage gives a company more room to invest through a downturn and reduces the risk of dilution or distress.

Price performance and shareholder returns

Over the past year NVDA returned 75.1% against 4.0% for AMZN; on a three-year annualised basis it is 3.0% vs 42.8%. NVDA yields 2.8% and AMZN yields 0.0%. Past performance never guarantees future results, but the multi-year track record shows how the market has rewarded each business so far.

Which stock fits which investor

For value-oriented investors, NVDA is the better fit on today's multiples. Growth investors will likely prefer NVDA, which is expanding faster. Income investors should lean toward NVDA for its higher shareholder yield, while investors who prize quality-at-a-reasonable-price will favour AMZN for its superior returns on capital. This is a comparison of facts, not a recommendation — your time horizon, risk tolerance and existing holdings should drive the final decision.

• Value: NVDA
• Growth: NVDA
• Income: NVDA
• Quality: AMZN

Frequently asked questions

Is NVDA or AMZN the better buy right now?

Neither is universally "better." NVDA scores 5 and AMZN scores 1 on our six-factor framework. NVDA is cheaper, NVDA grows faster, and AMZN is higher quality — so the right pick depends on your objective.

Which stock is cheaper, NVDA or AMZN?

NVDA is the cheaper stock across forward P/E (10.38 vs 45.95), EV/EBITDA (24.59 vs 32.34) and price-to-sales (18.21 vs 20.74).

Which has grown faster, NVDA or AMZN?

NVDA has the stronger growth profile, with three-year revenue CAGR of 25.5% for NVDA versus 16.9% for AMZN.

Which stock pays a bigger dividend?

NVDA yields 2.8% and AMZN yields 0.0%, so NVDA is the stronger income choice.

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