After a very long time, we can see consumer sentiment finally improve. The Black Friday sales and the holiday season will help several e-commerce companies report strong sales and revenue for the final quarter of the year. As the economy improves, consumer spending improves and this means better numbers for e-commerce businesses. If you want to make the most of the upward trend, now is the time to consider the top e-commerce stocks to buy.
Amazon (AMZN)
One of the biggest e-commerce stocks for 2024 is Amazon (NASDAQ:AMZN). The global giant has been on a wild ride this year. While the upward momentum wasn’t solely due to the e-commerce sales, it could also be attributed to the Amazon Web Services.
Black Friday and holiday shopping will contribute to the revenue this quarter and this will take the stock higher when it reports results in 2024. Reuters reported that the company hit $38 billion in online sales across the United States only in the five days between Thanksgiving and Cyber Monday.
In the third quarter, it reported a 13% year-over-year increase in revenue to hit $143.1 billion, and the net income hit $9.9 billion. The EPS came in at 94 cents per share. Even the digital advertising revenue increased 26% year over year, and AWS saw a 12% growth.
The last quarter could be exceptional for Amazon, and with an improvement in consumer spending, we could see the company impress investors. Additionally, one of its biggest revenue drivers, AWS is already growing stronger. The company aims to make the most of artificial intelligence and has invested $4 billion in Anthropic to enhance generative AI.
Investors should keep in mind that Amazon is not about a single product, rather, it is an entire ecosystem that offers a wide range of products and services including streaming. When you consider the business as a whole, it looks highly attractive. AMZN stock is exchanging hands for $149, and is at a 52-week high but it has a lot more to come. Yes, the stock is expensive but it is worth putting your money into. It is up 76% year to date and has the potential to keep moving higher.
Shopify (SHOP)
Another e-commerce platform worth taking note of is Shopify (NYSE:SHOP). It helps companies build online stores and sell products. It makes revenue through monthly subscriptions which helps ensure a recurring revenue for the company. Many businesses rely on Shopify and are willing to pay the monthly subscription as long as they are attracting consumers.
Notably, it reported the best Black Friday in history as the merchants on its platform managed to generate $4.1 billion in sales. I believe this is only the beginning for the company, and the holiday season could be strong.
Financially, Shopify has impressed investors with the numbers. It saw a 25% year-over-year rise in revenue to hit $1.7 billion and a 36% year-over-year increase in gross profit. SHOP stock has enjoyed the upside momentum and is trading at $76 today, up 115% year to date.
There is no stopping its growth and while it is at the 52-week high, it can hit $100 very soon. While the business isn’t close to the highs it enjoyed in 2020 and 2021, it still shows strong signs of improvement. This could also be attributed to the high consumer spending during the pandemic when we spent a lot of time at home.
The company takes a fee from the purchase price for every transaction you make and if you buy through Shopify Payments, it will make more. It has created a business model which is a win-win for Shopify, as well as the merchants registered on it. The stock is expensive, but it is one of the best companies to invest in right now. While it is too soon to call Shopify a real winner of the holiday shopping season, it is pretty close to it.
Walmart (WMT)
While no company has been immune from the impact of high-interest rates and low consumer spending, Walmart (NYSE:WMT) has still managed to show strong year-over-year growth. In the third quarter, it reported a revenue of $160 billion, which is up 5.2% year over year, and e-commerce sales were up by 24% YOY. It is known as the world’s biggest retailer for a reason and offers a massive range of products at low prices.
One of the top e-commerce stocks, WMT stock is exchanging hands at $152 and is up 6% year to date. The company expanded into groceries a few years back and this ensured consistent revenue even in times of high inflation. This is where Walmart can never go wrong because we will always need groceries, no matter the market situation.
It has seen an improvement in cash flow which is at $19 billion and this means investors will be able to enjoy steady dividends. The company has enough liquidity to invest in growth while also rewarding shareholders. The stock has a dividend yield of 1.49% and pays a quarterly dividend of $0.57.
It has raised the guidance for 2023 and now expects sales growth of 5% to 5.5%. This is a sign that the management is optimistic about the future of the company and we can expect an uptick in the profit margin.
On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
