Amazon.com vs NVIDIA Which Is More Profitable?

Amazon.com and NVIDIA are two prominent companies in the technology sector with vastly different business models. Amazon.com, the e-commerce giant, has experienced unprecedented growth in recent years, riding the wave of online shopping trends. On the other hand, NVIDIA, a semiconductor company, has carved out a niche for itself in the gaming and data center markets with its cutting-edge graphics processing units. Both companies have seen their stock prices soar, but investors must carefully evaluate the opportunities and risks associated with each before making investment decisions.

Amazon.com or NVIDIA?

When comparing Amazon.com and NVIDIA, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Amazon.com and NVIDIA.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Amazon.com has a dividend yield of -%, while NVIDIA has a dividend yield of 0.03%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Amazon.com reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, NVIDIA reports a 5-year dividend growth of -23.48% year and a payout ratio of 1.02%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Amazon.com P/E ratio at 42.66 and NVIDIA's P/E ratio at 65.83. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Amazon.com P/B ratio is 8.21 while NVIDIA's P/B ratio is 60.00.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Amazon.com has seen a 5-year revenue growth of 1.33%, while NVIDIA's is 1.68%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Amazon.com's ROE at 21.82% and NVIDIA's ROE at 115.52%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $199.62 for Amazon.com and $140.08 for NVIDIA. Over the past year, Amazon.com's prices ranged from $141.50 to $215.90, with a yearly change of 52.58%. NVIDIA's prices fluctuated between $45.01 and $149.77, with a yearly change of 232.75%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.