Nvidia Could Soon Trail Only Amazon in Tech Revenue. Why I Favor NVDA Stock Here.

Nvidia’s (NVDA) transformation during the artificial intelligence (AI) boom has been nothing short of remarkable, and the chipmaker could soon reach another major milestone. Based on its latest growth outlook, Nvidia could eventually become the second-largest U.S. technology company by annual revenue, overtaking giants like Apple (AAPL) and Alphabet (GOOGL) and trailing only Amazon (AMZN). That would be an extraordinary achievement for a company that, before the AI boom, was primarily known for selling graphics processors to gamers.

Still, comparing Nvidia and Amazon purely on revenue would be misleading given the significant differences between their business models. Amazon generates hundreds of billions of dollars from a sprawling ecosystem that includes e-commerce, cloud computing, advertising, subscriptions, and logistics. Meanwhile, Nvidia derives much of its sales from high-margin data-center chips and AI infrastructure. Interestingly, the two companies are also becoming increasingly intertwined.

I like both companies as long-term investments, but if I had to choose between them at current levels, which one would get the nod? Let’s take a closer look.

Nvidia Breaks Post-Earnings Losing Streak on Blockbuster Guidance

Last week, Nvidia brought much-needed reassurance to investors concerned about the durability of the AI boom. The world’s most valuable company reported strong second-quarter results and issued blockbuster guidance after the bell last Wednesday. The report sent NVDA stock sharply higher in the following session, snapping a four-quarter streak in which shares fell after earnings despite upbeat results and guidance.

NVDA stock popped almost 9% on Aug. 27, its biggest gain since April 2025. The rally added $442 billion to Nvidia’s market value, marking the second-largest one-day increase ever recorded by a company. The gain was second only to Microsoft’s (MSFT) $450 billion post-earnings surge earlier this year.

The key catalyst behind the stock surge came during Nvidia’s Q2 earnings call, when CFO Colette Kress said to expect 70% revenue growth in fiscal 2028. That was well above the 45% growth analysts had expected. Later in the call, CEO Jensen Huang said fiscal 2028 growth could be even higher if the company resolves supply bottlenecks, particularly in memory, while Kress noted that demand for Nvidia’s products would support revenue growth of as much as 100%. The blockbuster outlook eased investor concerns about a potential bubble in the AI economy.

Nvidia Is Closing In on Amazon’s Revenue Scale — But With a Very Different Business Model

The scale of that outlook becomes even more striking when translated into absolute terms. Nvidia’s fiscal 2028 revenue growth guidance implies sales of about $699 billion, based on a consensus revenue estimate of $411 billion for the current fiscal year. That would put Nvidia ahead of Alphabet and Apple based on current analyst estimates, trailing only Amazon — which is projected to generate nearly $1 trillion in sales next year — among U.S. technology companies. It would mark another remarkable milestone for a company that, before the AI boom, was largely a niche chipmaker focused on gaming.

Yet the revenue comparison tells only part of the story, given the stark differences between Nvidia’s and Amazon’s business models. Nvidia operates a high-margin, asset-light business centered on designing advanced GPUs, networking products, and computing platforms used in AI, data centers, gaming, and professional visualization. The company outsources chip manufacturing to foundry partners such as Taiwan Semiconductor (TSM), allowing it to focus on semiconductor design, software, and its CUDA ecosystem. CUDA helps lock in millions of developers and creates substantial switching costs for enterprise customers. That software-hardware integration has helped shift Nvidia’s primary revenue engine from consumer gaming to data centers, while giving the company significant pricing power and operating leverage.

By contrast, Amazon runs a far more diversified and capital-intensive business spanning e-commerce, cloud computing, advertising, logistics, and subscription services. Its retail operations generate enormous revenue but operate on relatively thin margins. The company’s main profit engine is Amazon Web Services (AWS), its cloud-computing unit, which provides scalable infrastructure to enterprises and contributes a disproportionate share of operating income. Amazon also invests heavily in fulfillment centers, transportation networks, data centers, and other infrastructure to support its scale.

Nvidia or Amazon: Which Tech Giant Looks More Attractive at Current Levels?

I’m personally bullish on both Amazon and Nvidia and hold shares of both companies in my portfolio. Given the overlap between the two companies, it’s also not easy to say which one I prefer more. 

Nvidia’s growth relies heavily on sustained capital spending by hyperscalers such as Amazon, whose massive AI infrastructure buildout directly fuels demand for the chipmaker’s GPUs and networking products. Hyperscalers reportedly accounted for roughly 55% of Nvidia's data-center revenue in the latest quarter. Meanwhile, Kress noted on the earnings call that Nvidia has expanded its partnership with AWS, with the latter set to deploy 2 million additional Nvidia GPUs from the current quarter through Q2 fiscal 2029. “Amazon will also adopt our full physical AI stack […] to power its fleet of warehouse robots,” Kress added.

Despite investing heavily in its own custom AI processors, Amazon still relies on Nvidia GPUs to meet surging customer demand for high-performance AI computing, underscoring the complementary rather than purely competitive nature of the two companies’ chip strategies. Huang said on the Q2 call that he isn’t concerned about competition from hyperscalers’ custom processors because those chips are typically designed for narrower, more specialized applications.

The recent expansion of Nvidia’s partnership with AWS lends support to that view. AWS revenue growth has become one of the most closely watched metrics in Amazon’s earnings reports. AMZN stock surged more than 15% in late July after the company reported accelerating AWS growth, easing investor concerns about whether its massive capital spending would generate sufficient returns.

However, if I had to choose between the two companies, I would focus on the following factors. First, analysts expect Nvidia to report adjusted EPS of $9.29 in the current fiscal year (fiscal 2027), representing 95% year-over-year (YOY) growth. Revenue is projected to rise 90% YOY to roughly $411 billion. For fiscal 2028, analysts expect Nvidia's adjusted EPS to rise 66% YOY to $15.40, while revenue is projected to grow 63% to $672 billion. For Amazon, adjusted EPS is projected to rise 75% YOY and revenue rise 16% YOY in current fiscal 2026. In fiscal 2027, however, adjusted EPS is expected to decline 17% YOY while revenue is expected to grow 14% YOY. Of course, there’s little sense in comparing the companies’ headline growth figures given the differences in their business models. The more important distinction lies elsewhere.

Both Nvidia and Amazon have forward growth rates well above their respective sector medians, which would typically support premium valuations. That is the case for Amazon, whose forward price-to-earnings (P/E) ratio trades at a premium to the sector median. At the same time, Nvidia’s forward P/E stands at 23.7 times, roughly in line with the sector median. NVDA stock also trades at just 14.3 times fiscal 2028 earnings, well below the S&P 500’s ($SPX) forward P/E of about 20 times.

The main factors weighing on Nvidia’s valuation are concerns about the sustainability of AI spending, competition from custom AI processors, and criticism over circular financing. Huang sought to address some of these concerns on the latest earnings call, arguing that demand continues to accelerate while downplaying the competitive threat from custom chips. Kress also pushed back on the circular financing criticism, saying, “We recognize the scale of this support, and we know some will call this circular financing. We see it differently […] The equity returns on our invested capital will be excellent.” Of course, that may still not be enough to convince some investors. But even accounting for the risks, I believe Nvidia’s fiscal 2028 P/E looks absurdly cheap.

With that, I would favor Nvidia over Amazon at current levels, as I believe a company that remains at the center of the AI boom deserves a higher valuation multiple. Nvidia’s fiscal 2028 P/E of 14.3 times appears to embed a much more mature phase of the AI investment cycle. But the reality is that AI demand continues to accelerate, and Nvidia has said growth could be even stronger if not for supply constraints. In my view, that valuation leaves room for meaningful multiple expansion, at least toward the broader market’s level, creating an additional source of upside beyond earnings growth alone.