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Amazon and Shopify are leading e-commerce companies that differ significantly in their business models. As of Q3, Amazon reported $180 billion in revenue with a 13% year-over-year growth, while Shopify generated $2.8 billion, achieving 32% year-over-year growth. Shopify also boasts a net profit margin of 33.8%, significantly higher than Amazon’s 11.8%.
Amazon’s diversification includes revenue from Amazon Web Services (AWS) and online advertising, which grew 20% and 24% year-over-year, respectively, contributing to over 25% of total revenue. In contrast, Shopify’s revenue streams, including merchant solutions and subscriptions, are growing rapidly, with subscriptions increasing by 38.2%.
Despite Shopify’s faster growth rates, Amazon has a P/E ratio of 33.90 compared to Shopify’s 84.06, indicating better valuation and more safety for investors. As Amazon continues to lead in cloud computing and artificial intelligence initiatives, analysts regard it as the more stable investment over Shopify.
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