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Let's now come back to benchmarking between the two powerful megacaps: Amazon and Apple. Which of the two has better chances for further upside? I feel our discussion on this subject as a fine tradition, which can become long-standing and perfectly suited for February, as both firms reported for the ending quarter  to expose their major weaknesses and strengths. What is more important, this is exactly the moment when the crowd clearly shows its attitude to the balance of those pros and cons. IMHO, just like in February 2024, investing in Amazon looks preferable.

Shares of the largest e-commerce platform in the world traded around $170 nearly a year ago, then rose 18% over the next five months and now are about 35% higher year-over-year. This great move happened despite a brief loss of widely expected pace in the delivery of cloud storage capacities, which led to losing upside momentum in early August with a technical rollback even below the starting levels. But the overall annual growth of Amazon stock still exceeded similar achievements of Apple, whose value eventually provided investors with 25% of income. Besides, Apple declined gradually until April 2024 before recovering later, so that the iPhone-maker did not provide any tangible income to its shareholders until mid-summer.

At the first half of 2025 the history could repeat itself. Why does it seem so? Apple came under notable pressure once again, as massive profit taking had started immediately after its share price jumped by nearly 4% to follow the upbeat quarterly report. The next wave of a volatile market's response even pushed Apple share price 5% down from above $247 to as low as $225.70 when the dust settled. This pullback completed more than 13% of Apple stock's cyclic correction from all-time highs detected around $260 in the pre-Christmas time. Meanwhile, Amazon is still shining, just holding the heights about a 5.5% away from its corresponding historically record peaks, which were detected only several days ago. A relative weakness in Amazon's cloud segment, called Amazon Web Services (AWS), is responsible for a moderate retracement of the stock again. However, the market is already aware of this pitfall from the movements in 2024, and so the majority on Wall Street no longer perceives this reason as a serious obstacle in 2025.

The company's cloud unit reported a 19% rise in sales to $28.79 billion, which was only slightly falling short of analyst pool's estimates of $28.87 billion. AWS could be growing even faster, "if not for some of the constraints on capacity, and they come in the form of chips from our third-party partners coming a little bit slower than before," Amazon CEO Andy Jassy commented. When there is no decline in demand, but there are delays in capacity due to counterparties, then this is a completely different matter, isn't it? Again, Amazon joined the club of smaller cloud paces headed by other leading providers, including Microsoft and Google, but both of them showed a more notable difference between elevated hopes and actual cloud numbers. Thus, Amazon is still a clear winner in this race compared to its major competitors.

Again, the sun of the holiday shopping season boosted Amazon's retail numbers to offset the cloud shadows from what one may interpret as weakness. E-commerce provided sales growth of 7% in the quarter to reach $75.5 billion, which was $1 billion above consensus estimates of $74.5 billion. The total Q4 revenue of Amazon was $187.8 billion, compared with the average pool bets on $187.3 billion. Its Q4 EPS (earnings per share) of $1.86 went far through the roof of $1.47 in average Wall Street projections. Amazon is investing heavily in AI software, which strategy probably began to bear fruit. AI is "probably the biggest technology shift and opportunity in business since the [appearance of] internet", as "virtually every application" currently in existence today is on track to be "reinvented" by AI technology, according to Jassy.

As to Apple's AI strategy, it now looks less convincing. Apple is positioning AI features like fast drafting emails or transcribing phone calls, but it is still rolling them out too slowly in most regions beyond the U.S. Apple has not yet defined and secured a constant partner to release AI features in China through the regulation and language barriers. In markets where we have "rolled out Apple Intelligence, the year-over-year performance on the iPhone 16 family was stronger than those where Apple Intelligence was not available," its CEO Tim Cook admitted. He added that Apple Intelligence is still coming in French and German in April, with no timeline so far for when it would be available in China.

That's why iPhone quarterly sales dropped from $69.70 billion a year earlier to $69.14 billion, compared with the $71.03 billion that analysts were expecting, but iPhone sales decreased by 11% to $18.51 billion in Greater China vs $20.82 billion in the same quarter of 2024 and $21.5 billion of consensus analyst projections. The results are very poor amid rising competition from Chinese makers of quality gadgets. And that's why the Wall Street crowd became so sceptical of new investment into Apple right here and now, despite all Apple's widely expected records on earnings of $2.42 per share and total revenue of $124.3 billion, thanks to Apple Pay and App Store offerings, which gained by around 14%.

Wearables, home & accessories unit reported sales of $11.75 billion, also below estimates of $11.95 billion, and only Mac and iPad contributions with a new M4 chip were better at $8.99 billion and $8.09 billion respectively, beyond consensus estimates of $7.94 billion and $7.32 billion. The explanation here turned out to be very simple. AI features are more widely available on Apple Macs and iPads because their larger size allows using more powerful chips to create a "very key compelling reason for people to upgrade," according to Tim Cook again.

Apple suggested total sales for the current quarter might rise "in the low- to mid-single digit range" vs a 5% sales surplus expected by the analyst pool from January to March. The upbeat forward guidance was exactly what helped the stock to spike shortly in the night of the report. However, these are all again promises and projections, and the near future is often in doubt when there are unresolved problems in the present. Actually, no honours came here and now, as iPhone sales in 2024 were below previous achievements, so the 12-month average analyst target for Apple is only 6.8% above the current price, being at $252 now. Meanwhile, similar average estimates are at nearly $265 for Amazon, which is almost 15% higher than the current price range.

Above I cited analyst estimates compiled by Reuters. But if you ask my own opinion, I personally believe that Apple can repeat or exceed $260 for a while, but more waves of profit taking on any solid upticks will follow. As to Amazon, it is better positioned and may well technically hit $280 or higher. So, I plan to increase my stake in Amazon, taking advantage of the additional small pullback, but I will wait at least another six months to buy new Apple shares.