By Daniel Foelber
Publication Date: 2026-01-18 14:55:00
Wall Street is underestimating the growth potential of Nvidia’s Rubin architecture.
In 2024, Nvidia (NVDA 0.44%) and Amazon (AMZN +0.49%) were added to the Dow Jones Industrial Average, replacing Intel and Walgreens Boots Alliance.
In December 2024, I predicted that Nvidia would be a better Dow stock to buy than Amazon because of its reasonable valuation and superior business model. The recommendation was intended for long-term investors, not those seeking to make a quick profit on a one-year time horizon.
Still, the call has been right so far, with Nvidia gaining 38.9% in 2025 compared to just 5.2% for Amazon. In fact, Amazon was the worst “Magnificent Seven” stock in 2025 — underperforming Nvidia, Alphabet, Apple, Microsoft, Meta Platforms, and Tesla.
Even after Nvidia’s big 2025 gain, it remains a better buy than Amazon. Here’s why.
Image source: Getty Images.
Amazon’s success is largely tied to AWS
In its most recent quarter, Amazon achieved an operating margin of just 4.1% on its non-Amazon Web Services (AWS) business, which encompasses its online and physical stores, advertising, subscription services, third-party commissions, fulfillment, and shipping fees, and its miscellaneous “other” category. AWS is so profitable that it made up 60% of Amazon’s operating income for the nine months ended Sept. 30, 2025, even though it’s less than a fifth of total Amazon sales.
With 35.6% operating margins for the nine months ended Sept. 30, AWS is a high-powered cash cow and…
