Nvidia (NASDAQ: NVDA) has been one of the biggest beneficiaries of the AI revolution, with its powerful GPUs fueling the rise of generative AI. The company’s market cap has soared to $3.4 trillion, making it the second-most valuable company behind Apple.
With major tech companies pouring a combined $315 billion into data centers and AI infrastructure in 2025, Nvidia is positioned to capture a large portion of that investment.
However, despite its staggering 1,780% stock growth over the past five years, Nvidia may not replicate this explosive performance in the next five.
This brings us to Amazon (NASDAQ: AMZN), a company with deep AI integration that could eventually surpass Nvidia in market value.
Why Amazon Has the Edge in AI
While many companies are still exploring AI applications, Amazon is already leveraging AI across its diverse businesses:
1. AI-Powered E-Commerce Efficiency
Amazon has been using AI for years to optimize its e-commerce operations. CEO Andy Jassy highlighted how AI-driven robotics have cut fulfillment processing times by 25%.
Given that fulfillment accounted for over 17% of Amazon’s 2024 operating expenses, these AI advancements will significantly boost profitability.
2. Amazon Web Services (AWS) and AI Leadership
AWS, Amazon’s cloud computing arm, generates the majority of the company’s profits. To stay ahead, AWS has developed its own AI chips, Trainium and Inferentia, which offer cost-effective AI computing power.
Additionally, AWS provides AI tools like Amazon SageMaker to help businesses build and deploy AI models. Jassy emphasized that AWS has released nearly twice as many AI features as its leading cloud competitors in the past 18 months.
3. AI-Driven Digital Advertising Growth
Amazon’s AI isn’t just improving logistics, it’s also supercharging its advertising business. AI-powered recommendations and targeted ads appear across Amazon’s e-commerce platform, Prime Music, and Freevee streaming service.
Moreover, Amazon Prime Video now features ads by default, with users paying extra to remove them. This strategy has fueled Amazon’s advertising segment, making it its fastest-growing business.
Could Amazon Surpass Nvidia in Market Cap?
Nvidia currently boasts a $3.4 trillion market cap, while Amazon sits at $2.4 trillion. For Amazon to overtake Nvidia, it would require a 42% stock price increase, or a significant decline in Nvidia’s stock. But beyond simple stock fluctuations, Amazon’s diversified AI strategy could drive long-term value.
Amazon’s Path to Growth
Wall Street projects Amazon’s 2025 revenue at $699 billion, giving it a forward price-to-sales (P/S) ratio of 3.4. If it maintains this ratio and grows revenue at 10% annually, Amazon could reach a $3.4 trillion valuation by mid-2029. Even with a modest 7% annual growth, it could hit that mark by 2030.
Nvidia’s Risks
Nvidia has thrived on the AI-driven demand for its chips, leading to an extraordinary 489% stock price surge in just three years.
However, its stock has also seen sharp declines (20-25%) multiple times in the past year due to concerns over next-gen chip challenges and potential demand slowdowns. A real drop in AI chip demand could significantly impact Nvidia’s valuation.
The Bottom Line: Amazon’s AI-Powered Future
Nvidia remains a dominant AI player, but Amazon’s AI integration across e-commerce, cloud computing, and digital advertising gives it multiple growth avenues.
With a reasonable 35x forward earnings valuation and a solid AI strategy, Amazon is well-positioned to challenge Nvidia’s dominance in the coming years.
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