Are These The Best E-Commerce Stocks To Watch In July 2020?
When it comes to e-commerce, there are only two names that are worth the attention: Amazon (AMZN Stock Report) and Shopify (SHOP Stock Report). Even though the broader markets are still trading in the red for 2020, e-commerce companies continue to reach record highs. Shares of Shopify finally passed the $1,000 mark with a 150% return year to date whereas shares of Amazon have climbed 50% year to date.
Tech stocks related to digital services have been one of the biggest beneficiaries this year. That is understandable, as a stay at home orders mean more economic transactions are done at home. This further accelerates the rise of digital services. And they will continue to benefit amid the troubles with the reopening of the physical economy. With cases not slowing down, people are still afraid to go out. And that’s what makes these two e-commerce giants the top tech stocks to buy right now.
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Rise of E-Commerce and Cloud Services Benefits Amazon and Shopify
The spike in new coronavirus cases could mean the market is on track for an extended period of volatility and uncertainty. The hope for complete economic recovery has waned. Yet, if any companies can be considered well-positioned to dodge the Covid-19 crisis, there aren’t any better companies in the stock market today other than Amazon and Shopify. Of course, there are also companies like Netflix (NFLX Stock Report) and Zoom (ZM Stock Report) that are making excellent progress this year. But the focus here is on e-commerce. The coronavirus pandemic sped up the adoption of purchasing goods online. Even some who used to prefer shopping in stores have converted. That said, let’s take a closer look at the largest e-commerce stocks in both the US and Canada respectively.
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The Largest E-Commerce Stock In The US: Amazon
What’s special about Amazon is that the company has become almost indispensable to both casual consumers and large organizations. To many consumers, Amazon is the first thing that comes to mind when it comes to purchasing goods online. Similarly, to businesses, Amazon Web Services is undoubtedly the leader in providing cloud computing solutions. The shift to e-commerce has accelerated during the pandemic, with more people shopping online than ever before. If you had invested in AMZN stock 5 years ago, your investment would have increased by over 5 times. Now that the company is trading around $2,900 per share, I guess it won’t take long before it breaks the $3,000 mark. Some analysts are even estimating that it will go as high up as $5,000.
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Amazon will acquire self-driving start-up Zoox for more than $1.2 billion, marking Amazon’s biggest investment into the autonomous vehicle industry. The latest partnership could allow Amazon to develop a more efficient long-term delivery network with Zoox’s technology. That could potentially save the company up to $20 billion a year. With the technology, Amazon could also work with Zoox to create a ride-hailing fleet that could compete against Google’s Waymo self-driving division. The high profile acquisition is signalling Amazon’s desire to have a stake in the future of driverless vehicles. With its deep pockets, Amazon could prove to be a competitor hard to ignore and difficult to beat in the future.
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The Largest E-Commerce Stock In Canada: Shopify
Shopify is not only the largest e-commerce stock in Canada. It is also the biggest company in Canada in terms of market capitalization. You may have heard of Shopify. But you may not be able to say what the company does. Yet, you will almost certainly have used it. The clothes you bought from your favourite boutique’s online store while grounded at home? That’s probably powered by Shopify.
Unlike Amazon which is an online marketplace, Shopify is a specialized e-commerce platform that gives you the tools to build your very own online store. When many brick and mortar stores were forced to close during the pandemic, many retailers turned to Shopify to expand their online presence and sales channels to keep their businesses running.
SHOP Stock Breaks $1,000 Mark With Chipotle Deal
The latest deal saw Shopify working with Chipotle (CMG Stock Report) to create virtual storefronts for the restaurant chain’s suppliers. The new partnership aims to help Chipotle’s suppliers sell their goods directly to customers to overcome the economic difficulties caused by the pandemic. This could give rise to a new trend in the commercial market place in the future. Many merchants who have converted to e-commerce during this trying time could maintain a strong online presence. That could last beyond the pandemic when they discover the additional reach the internet provides.