The e-commerce industry is still expected to grow despite global adoption. Expectations hold at a 9.47% compounded annual growth rate from now until 2029.
That sustained growth rate can translate into gains for several e-commerce stocks. The top e-commerce stocks have comfortably outperformed the stock market and have the potential to generate additional gains. These are some of the top stocks to consider in the e-commerce industry.
Amazon (AMZN)
Amazon (NASDAQ:AMZN) has the largest online marketplace, consistently reporting revenue growth. The tech giant reported 14% year-over-year (YOY) revenue growth in the fourth quarter of 2023.
Both domestic and international sales had double-digit growth rates to close out the year. Also, Amazon’s highly profitable cloud computing segment grew by 13% YOY.
Further, Amazon has developed a vast moat due to its product offerings, convenience, and shipping network. The corporation has a big lead in the e-commerce industry but also has other bright spots in its business. Advertising and video streaming revenue continue to grow. And, they can become major drivers for the company’s future financial performance.
The Magnificent Seven stock has been a solid long-term pick. The stock is up by 85% over the past year, more than doubling over the past five years. Currently, Amazon is rated as a strong buy with a projected 16% upside from 41 analysts. Each analyst gave the stock a buy rating. Amazon does not have any hold or sell ratings.
Meta Platforms (META)
E-commerce store owners have to put their products in front of more people to generate sales. Many of these business owners turn to online advertising to generate more awareness. In truth, few firms can compete with Meta Platforms (NASDAQ:META).
The advertising giant is currently rated as a strong buy with a projected 9% upside. The highest price target of $609 per share implies that shares can gain an additional 25.6% from current levels. The stock has already gained 40% year to date (YTD), and a renewed focus on profitability suggests that more gains can be ahead.
Meta Platforms tripled its net income in Q4 of 2023 and announced its first dividend. Revenue was up by 25% YOY. Also, the company’s social networks are growing based on an 8% YOY increase in family daily active people. “Family” entails all of Meta Platforms’ social media properties. The number of daily users reached 3.19 billion while monthly active users came in at 3.98 billion. That’s a 6% YOY increase.
Walmart (WMT)
Walmart (NYSE:WMT) has established itself as a leading retailer for people who are seeking affordable products. The company is working on attracting high-income shoppers, which should help it generate better earnings. The rising cost of living has brought more people to Walmart stores.
Consolidated revenue grew by 5.7% YOY to reach $173.4 billion in Q4 2023. Walmart has been primarily known for its retail stores, but it’s gaining market share in the e-commerce industry. Global e-commerce sales increased by 23% YOY, and the recent acquisition of Vizio will help. Vizio will strengthen Walmart’s advertising division, which many e-commerce businesses will turn to for additional visibility.
Finally, Walmart offers the most stability out of these investments. The stock has gained 86% over the past five years and was only down by 2% in 2022. Amazon and Meta Platforms recorded meaningful losses during those quarters. Walmart’s e-commerce and advertising segments can power up revenue and profits in future quarters. The stock currently trades at a 32 P/E ratio and has a 1.37% dividend yield.
On this date of publication, Marc Guberti held a long position in AMZN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
