Wall Street seems to be underestimating the growth prospects of Nvidia’s Rubin architecture.
In 2024, Nvidia and Amazon joined the Dow Jones Industrial Average, taking the place of Intel and Walgreens Boots Alliance.
Back in December 2024, I had a feeling that Nvidia would be a more favorable buy in the Dow than Amazon, mainly due to its reasonable pricing and robust business model. Of course, this recommendation targets long-term investors rather than those seeking immediate gains within a year.
So far, that choice has proven accurate, as Nvidia saw a 38.9% return in 2025 against a modest 5.2% for Amazon. In fact, Amazon didn’t fare well compared to others in the “Magnificent Seven” stocks of 2025, lagging behind Nvidia and others like Alphabet, Apple, Microsoft, Meta Platforms, and Tesla.
Even with solid profits in 2025, Nvidia still presents a better value than Amazon. Here’s why:
Amazon’s success heavily relies on AWS
In its latest quarter, Amazon reported an operating margin of just 4.1% outside of Amazon Web Services (AWS). This segment encompasses both its online and physical stores along with advertising and subscription services. Despite less than 20% of its overall revenue, AWS generated 60% of Amazon’s operating profit in the nine months ending September 30, 2025.
AWS boasts an impressive operating margin of 35.6% for the same period, acting as a significant cash source for Amazon. However, it has faced challenges in recent years, with growth tapering off against increasing competition from Microsoft and Alphabet’s Google Cloud, as well as Oracle.
Rubin could unlock new revenue opportunities for Nvidia
While AWS bolsters Amazon’s overall business, Nvidia operates more as a dedicated artificial intelligence (AI) enterprise. Currently, about 90% of Nvidia’s revenue comes from data center sales. The remaining 10% is also quite lucrative, targeting sectors like gaming, professional visualization, automation, and robotics.
Nvidia recently unveiled its Rubin architecture at CES, featuring six chips aimed at advancing AI technologies, robotics, and self-driving systems. Interestingly, Nvidia is rolling out Rubin earlier than expected, with plans for deployment to major players like AWS by late 2026.
Despite its considerable size, Nvidia continues to experience rapid profit growth, a trend that seems unaffected by the law of large numbers. With innovation driving profits and high margins, Nvidia’s offerings now span beyond just graphics processing units (GPUs) to include networking, interconnects, and central processing units (CPUs) for rack-scale systems. As Nvidia’s role in AI data centers expands, it’s reasonable to speculate that its stock could keep climbing.
Nvidia proves to be a stronger option for long-term investors
Nvidia’s impressive profit margins and stable growth rates support a higher valuation compared to Amazon. Last year, Amazon’s revenue increased faster than its stock prices, making it look more affordable. Currently, it has a forward price-to-earnings ratio of 30.1, whereas Nvidia’s is at 39.
However, I’d still lean towards Nvidia over Amazon, thanks to its growth potential. Even if its data center business faces a slowdown, Nvidia could tap into new opportunities that might offset any dips. On the other hand, Amazon’s heavy reliance on AWS could restrict profit growth in its e-commerce sector.
In summary, Nvidia stands out as a stronger buy for 2026. However, with some new value emerging in Amazon, it might warrant a closer look.
