Consumer Stocks Show Strong Recovery with Promising Investments

Consumer stocks have rebounded significantly after a brief bear market earlier this year. Despite ongoing tariff uncertainties, the consumer sector remains a strong area for long-term investment.

Here are three stocks that investors may consider for potential growth.

1. Amazon (NASDAQ: AMZN)

Amazon combines elements of both consumer services and technology. It leads in e-commerce and cloud computing with Amazon Web Services (AWS), and has developed a major digital advertising platform.

The company’s use of artificial intelligence (AI) is a key growth driver. AWS helps clients build AI models, while Amazon enhances e-commerce operations through AI-driven tools for third-party merchants.

In logistics, AI is optimizing routes and enhancing warehouse efficiency, contributing to better operating leverage in its e-commerce division.

Despite recent stock gains, Amazon’s valuation remains attractive historically.

2. Dutch Bros (NYSE: BROS)

Dutch Bros is a fast-growing coffee shop chain focusing on drive-thru locations, which offer superior unit economics. With over 1,000 shops across 18 states, it aims to grow to 2,029 locations by 2029, targeting 7,000 total locations.

The company is also looking to boost same-store sales by expanding its food offerings. Currently, food makes up less than 2% of sales, while major competitors like Starbucks average 19%.

Dutch Bros has also been slow to adopt mobile ordering, presenting another growth opportunity.

3. Philip Morris International (NYSE: PM)

Philip Morris International distinguishes itself in the tobacco sector by not selling cigarettes in the U.S. This positions the company well amid declining domestic cigarette sales.

International demand remains steady, supported by pricing power. Growth is being driven by smokeless products like Zyn and Iqos.

Zyn, a nicotine pouch, is gaining traction in the U.S., while Iqos is expanding internationally and awaiting FDA approval for its newer system.

With superior unit economics compared to traditional cigarettes, Zyn offers six times better contribution levels, while Iqos provides two to 2.5 times better economics.

Philip Morris is also insulated from tariffs, as its operations do not involve U.S. cigarettes, and Zyn is manufactured domestically for local customers. The stock has surged nearly 50% this year but still offers reasonable valuation metrics, including a forward P/E ratio of 24 based on 2025 estimates.

Considerations for Investment in Amazon

Potential investors should note that Amazon was not included in a recent list of top stock recommendations, despite its strong market performance.

Historical context shows that other stocks have generated significant returns for early investors, which adds perspective when evaluating current recommendations.

The views expressed in this article represent the author’s opinions and do not necessarily reflect those of Nasdaq, Inc.