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Monday, June 17, 2024

E-Commerce Elites: 3 Stocks That Will Be on Fire in 2024

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As we eagerly await rate cuts from the Federal Reserve, there is high optimism in the air. Strong quarterly earnings, low inflation and better expectations for the coming quarter are pushing the economy in the right direction. Several e-commerce stocks beat Wall Street expectations and are highly confident about business this year. Consumers have maintained a high level of spending and this can be seen in strong company results.

Several e-commerce companies have gained momentum due to the holiday season and believe that consumer spending will steadily rise. For investors who want to make the most of the changing macroeconomic situation, now is the best time to buy e-commerce stocks with high upside potential. With the expected rate cuts, we could see these stocks soar. Here are three e-commerce stocks to buy and hold for 2024. 

Amazon (AMZN)

Closeup of the Amazon logo at Amazon campus in Palo Alto, California. The Palo Alto location hosts A9 Search, Amazon Web Services, and Amazon Game Studios teams. AMZN stock

Source: Tada Images / Shutterstock.com

As the biggest e-commerce giant, there is no stopping the growth of Amazon (NASDAQ:AMZN). The company is dominating the global market and offers every product, including cars. However, Amazon is so much more than the products it offers.

The company has seen a strong rebound in 2023, and that momentum is set to continue this year. Driven by holiday sales, it reported impressive numbers in the fourth quarter and saw revenue growth of 14%. It beat analyst expectations and reported a revenue of $170 billion and an earnings-per-share (EPS) of $1.00. 

Two of the company’s biggest revenue generators, Amazon Web Services (AWS) and its advertising segment, saw significant growth in the final quarter of 2023. AWS generated a revenue of $24.2 billion, an increase of 13% year-over-year (YOY), while advertising revenue stood at $14.7 billion.

The company has optimistic guidance for the first quarter and expects sales in the range of $138 billion to $143.5 billion. The sales at AWS also climbed 13% quarter-over-quarter (QOQ), though it was down 20% YOY. However, management expects demand for AWS to pick up this year as the economy improves. 

AMZN stock is just getting started and it could soar to new highs in the next five years. Trading at $170 today, the stock is near its 52-week high. I believe it will keep moving upwards from here. It is up almost 14% year-to-date (YTD), as stellar recent results gave it a strong push.

Investing in AMZN stock is a wise decision as this e-commerce stock will only continue to expand over the years. As the economy improves and consumer spending increases, Amazon will benefit. 

Shopify (SHOP)

Shopify on the phone display.

Source: Burdun Iliya / Shutterstock.com

Shopify (NYSE:SHOP) was the real winner of the holiday season in 2023. This hot e-commerce stock is trading at $80 today and is up 8.5% YTD. The stock has gained over 64% in the past year, and that upward momentum is set to continue through 2024. Shopify reported Q4 earnings today and it had a stellar quarter. It has beaten analyst expectations for the past five quarters and continues to do so.

Revenue increased 24% to $2.1 billion YOY, beating analysts’ estimates. In the third quarter, the company saw a 25% growth rate and a massive rise in the free cash flow (FCF). It was the fourth consecutive quarter of reporting FCF and this is providing the management with enough liquidity to keep investing in the business. 

Shopify caters to several merchants, and in 2023 it divested its logistics business which led to an improvement in its profit to some extent. The company excels at its core business of helping merchants, and this is one reason why merchants do not shift to another service provider. Plus, Shopify’s partnerships with other e-commerce companies like the integration of Buy with Prime can enhance user experience.

If investors wait any longer, they could miss out on an opportunity to buy this solid e-commerce stock. Waning inflation will boost consumer spending, and as one of the best e-commerce stocks, SHOP is set to gain.

Walmart (WMT) 

Walmart (WMT) logo on a store front

Source: Ken Wolter / Shutterstock.com

Walmart (NYSE:WMT) recently announced a 3-for-1 stock split which means now is one of the best time to buy this company’s shares. WMT stock is trading at its 52-week high of $169, has gained 16% in the past 12 months and is up 6.5% YTD. This is the first stock split announced by the company and will take the total number of shares from 2.7 billion to 8.1 billion. 

Fundamentally, Walmart is in a good place. In the third quarter, the company saw a 5.2% growth in revenue YOY. It saw a 15% surge in global sales to hit $24 billion, and its EPS came in at $1.53. Fourth quarter numbers are expected to be reported on Feb. 20. WMT is one of the highly undervalued dividend e-commerce stocks that can add stability to your portfolio. Jefferies analyst has raised the price target of the stock from $190 to $195 with a buy rating.

The company is aiming for high growth, and an improvement in the economy will help boost its numbers. It also believes in rewarding shareholders and enjoys a dividend yield of 1.34%. The stock split is a good opportunity to load up on the stock and make the most of its upside in the coming weeks.

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.

Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long term gains. Her knowledge of words and numbers helps her write clear stock analysis.

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