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With the anticipation of rate cuts from the Federal Reserve, the economic outlook is particularly optimistic. Strong quarterly earnings, low inflation, and positive expectations for the upcoming quarter are propelling the economy in a positive trajectory. E-commerce stocks have outperformed Wall Street predictions and are confident about their business prospects this year. Consumer spending remains robust, as evidenced by the strong company results.
The holiday season has propelled numerous e-commerce companies forward, with the belief that consumer spending will continue to escalate. For investors eyeing opportunities in the evolving macroeconomic landscape, the present moment holds promise for securing e-commerce stocks with substantial growth potential. With anticipated rate cuts, the potential for these stocks to skyrocket looms large. Here are three e-commerce stocks primed for buying and holding through 2024.
Amazon (AMZN)
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Unquestionably the behemoth of e-commerce, Amazon (NASDAQ:AMZN) is entrenching its dominance in the global market and offers an extensive array of products, including cars. However, Amazon embodies more than a mere product marketplace.
The company experienced a robust resurgence in 2023, and this momentum is projected to persist this year. Fueled by holiday sales, it reported impressive figures in the fourth quarter, achieving a 14% revenue surge. Outperforming analyst expectations, it posted a revenue of $170 billion and an earnings-per-share (EPS) of $1.00.
The company’s two major revenue generators, Amazon Web Services (AWS) and its advertising segment, witnessed significant growth in the final quarter of 2023. AWS garnered $24.2 billion in revenue, marking a 13% year-over-year (YOY) increase, while advertising revenue reached $14.7 billion.
With an optimistic outlook for the first quarter, Amazon anticipates sales within the range of $138 billion to $143.5 billion. AWS sales also surged 13% quarter-over-quarter (QOQ), albeit experiencing a 20% YOY decline. Nonetheless, management anticipates an increase in AWS demand as the economy improves.
Trading at $170 today, just shy of its 52-week high, AMZN stock has soared nearly 14% year-to-date (YTD) on the back of its stellar recent performance.
Investing in AMZN stock is a prudent move, as this e-commerce juggernaut is poised for continual expansion in the coming years. As the economy advances and consumer spending elevates, Amazon stands to reap significant benefits.
Shopify (SHOP)
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Shopify (NYSE:SHOP) emerged as the true victor of the 2023 holiday season. This hot e-commerce stock is currently trading at $80, boasting an 8.5% YTD increase. Over the past year, the stock has surged over 64%, and this upward trajectory is anticipated to persist throughout 2024. Shopify’s Q4 earnings reported outstanding performance, surpassing analyst expectations for five consecutive quarters.
Revenue soared 24% to $2.1 billion YOY, outpacing analysts’ estimates. In the third quarter, the company achieved a 25% growth rate and witnessed a substantial surge in free cash flow (FCF). This marks the fourth consecutive quarter of reporting FCF, which furnishes the management with substantial liquidity for further business investment.
Catering to numerous merchants, Shopify divested its logistics business in 2023, leading to a partial improvement in profitability. Excelling in its core business of assisting merchants, Shopify’s partnerships with other e-commerce entities, such as the integration of Buy with Prime, have the potential to enhance user experience.
For investors contemplating their next move, delaying entry into this solid e-commerce stock could mean missing out on a compelling opportunity. Diminishing inflation is poised to bolster consumer spending, and as one of the best e-commerce stocks out there, SHOP is primed for growth.
Walmart (WMT)
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Walmart (NYSE:WMT) recently revealed a 3-for-1 stock split, signaling that the present moment is opportune for acquiring a stake in this company. The current market price of WMT stock stands at its 52-week high of $169, having surged 16% over the past 12 months and 6.5% year-to-date. This marks the company’s debut stock split, elevating the total number of shares from 2.7 billion to 8.1 billion.
Fundamentally, Walmart is on solid ground. In the third quarter, the company experienced a 5.2% revenue surge YOY. It recorded a 15% global sales upswing, reaching $24 billion, and an EPS of $1.53. The fourth quarter figures are slated for release on Feb. 20. WMT ranks among the highly undervalued dividend-yielding e-commerce stocks that can infuse stability into your investment portfolio. A Jefferies analyst has raised the stock’s price target from $190 to $195, endorsing a buy rating.
The company is aiming for considerable growth, and an upturn in the economy will underpin its financial performance. Furthermore, it remains committed to rewarding shareholders, with a dividend yield of 1.34%. The stock split offers an attractive opportunity to accumulate shares and leverage its growth potential in the ensuing 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 presented in this article are the author’s and are subject to the InvestorPlace.com Publishing Guidelines.
Vandita Jadeja is a CPA and a freelance financial copywriter who relishes exploring stock dynamics through reading and writing. She ardently advocates for long-term stock holdings, leveraging her prowess in both words and numbers to craft lucid stock analyses.
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