Even before Coronavirus took the national stage this year, online shopping was on the up and up. With our increasingly busy lives, the digital world has made everything more efficient for consumers. The capabilities are incredible, allowing us to purchase virtually anything from the comfort of our own home. This sector has seen and will continue to see considerable growth from quarter to quarter. To prepare investors for this paradigm shift, we’ve put together a list of the top eCommerce stocks to buy today.
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Best eCommerce Stocks To Buy
Amazon.com Inc. (NASDAQ:AMZN)
Amazon is the company that fundamentally changed the eCommerce market. Originally focused on selling books, Amazon has its eyes set on rendering brick and mortar establishments a thing of last year. As the second-largest company in the US, Amazon has made billion-dollar valuations a thing of the past. As the largest eCommerce platform in the US, Amazon made sales of 96.15 billion in the third quarter of 2020.
Through the acquisition of Whole Foods in 2017, the scope of services in the lives of its customers continued to increase. Heading into the holidays, Amazon is expected to see growth, as it does every year. However, as the largest eCommerce name on the global market, it’s expected to continue to be a high-performance stock year-over-year.
eBay Inc. (NASDAQ:EBAY)
As another one of the largest eCommerce platforms in the US, eBay facilitates online sales between consumers and businesses. eBay has played an important part in allowing consumer-to-consumer transactions to continue in a pandemic world. Allowing the option for consumers to buy, purchase, and bid on new and used goods, eBay reached a gross merchandise volume of $90.21 billion in 2019.
eBay’s stock has flattened after reaching its all-time high price in July of 2020. The company’s price is quite attractive for current investment, especially as they are expected to continue in growth.
eCommerce Stocks: Retailers
Walmart Inc. (NYSE:WMT)
With sales of $510.33 billion in 2019, Walmart is the largest American retail corporation. The coronavirus pandemic has completely changed the brick and mortar sales narrative, and consumers are switching to online purchases. Therefore, now is a wonderful time to purchase Walmart stock. In doing so, investors are able to take advantage of their growing revenue due to a goal set on increasing their eCommerce presence.
Walmart hit its peak stock performance this year, like many other online and in-person retailers. However, being stuck between these two worlds of sales could be the reason behind projections suggesting average growth in the coming year.
Target Corporation (NYSE:TGT)
Target is the 8th largest retail chain in the US. As a major player in the new cheap-chic retail trend, online shopping has become a growing component of its business strategy. Online sales for 2020 will amount to $8.34 billion, which is just a mere portion of sales for larger companies like Amazon. That said, the coronavirus pandemic has lead to an increase of 10 million new digital customers this year.
As Target continues to grow its digital presence, they’re expected to put a number of new initiatives in place. One of these has been an emphasis placed on the importance of selling sustainable products.
The business reached its highest stock price in history in late November of this year. This could mean the price may be overvalued. Waiting a while before investing may be beneficial, especially with under average growth expected for the coming year.
Best Buy Co. (NYSE:BBY)
Recently surpassed by Amazon, Best Buy is the 2nd largest retail company involved in the sale of consumer electronics. The company has seen an increased amount of online sales in recent years. Best Buy has reflected the trend of many companies cashing in on increased performance with online sales during the pandemic.
Similar to Target, November was a record-breaking month for the business and its stock price. Companies such as Amazon have peeled away from brick and mortar sales in the last few years; the same can’t necessarily be said for Best Buy. The company has also begun to focus on customers picking up online orders in person.
Estimations project Best Buy to have an above-average increase in returns in the next year. Growth in revenue is likely a direct result of customer’s increased focus on consumer electronics and buying these products online.
eCommerce Stocks: Software
Shopify Inc. (NYSE:SHOP)
Shopify is a Canadian-based platform that makes it easy for small businesses to sell online. Shopify offers unique solutions including unlimited product listings on the eCommerce platform. Additionally, there’s a number of free extensions offered including email marketing integration.
Stock performance is at its highest point it has been in the 5 years Shopify has been public. Investors should be advised the business may currently be overvalued. That said, as the first non-US-based company on our list, this selection presents a particular advantage to investors looking to regionally diversify their portfolio.
Bigcommerce Holdings Inc. (NASDAQ:BIGC)
Similar to Shopify, Bigcommerce Holdings is a leading software-as-a-service company. Their solutions offer merchants and businesses of all shapes and sizes, a platform to conduct online business. Having gone public in August of this year, this company was founded in 2009 in Austin, Texas.
The company prides themself on their ability to offer simple solutions to their clients. Previously, putting together an eCommerce website was a painstakingly slow and involved process. So far, the stock has performed its best in October, just two months after its IPO. Coming out of Q4 in 2020, many businesses have put business improvement on hold until the first quarter of 2021.
That said, this could be a great buy right now for investors seeking undervalued stocks.
eCommerce Payment Stocks
Paypal Holdings Inc. (NASDAQ:PYPL)
Just as eCommerce platforms have lead to more sales taking place online, customers have needed reliable forms of payment. Paypal offers money transfer and financial service software for online shopping services that may not have POS systems in place.
By setting up an account, users are able to send, receive, and manage their money. Having an account also enables you to pay even if you don’t want to provide your credit card information. Additionally, the platform has provided an alternative to paper forms of payment such as money and checks. 5 years into being a publically listed company, Paypal is at its highest share price to date.
While it may currently be overvalued, this business will be an invaluable service as more of the public attempts to start a business using an eCommerce platforms, post-pandemic.
Square, Inc. (NYSE:SQ)
Similar in IPO timing to Paypal, Square is a financial service and mobile payment platform. While Paypal is quite a bit larger than Square, the two companies operate in fundamentally different markets.
Square, in comparison to Paypal, offers an entire suite of business management tools. Therefore, Square is better suited for brick-and-mortar businesses needing a POS system. Paypal is better suited for businesses primarily rooted in eCommerce. Square is also performing the best it has in history, signifying to investors a potential overvaluation.
The stock market for many eCommerce-related company operations tend to inflate near the third quarter as the holidays near. Investors should keep an eye out for a drop in price for both Square and Paypal. They’ll both be integral to the eCommerce environment in a post-coronavirus economy.
Best Chinese eCommerce Stocks
Alibaba Group Holding Limited (NYSE:BABA)
Often coined the “Amazon of the East,” Alibaba is an eCommerce company based out of China. The company, with specializations in retail, internet, and tech, is much more recent to the public stock market than Amazon.
The value of the company was $65.6 billion in November 2020. The largest future area of growth for the company in coming years is regional expansion outside of Southeast Asia. The eCommerce stock peaked in October of this year, but many experts speculate growth has been stunted. These speculations ride on current US-China political relations exacerbated by the coronavirus pandemic.
That being said, experts also predict a massive increase in the price of shares in the next 12 months. Investors hoping to cash out on this online shopping giant should not wait long.
JD.Com, Inc. (aka. Jingdong) (NASDAQ:JD)
As another e-Commerce company, JD.com is based out of Beijing, China. JD.com is Alibaba’s biggest competitor. That being said, JD controls just 17% of the market share in China, while Alibaba controls as much as 59% of the market. 12% of the company is currently owned by Walmart, who is evidently placing bets on the eCommerce competitor to Alibaba.
The two largest eCommerce stocks in China vary upon the investor’s strategy. JD presents a better opportunity for individuals betting that the company will widen its profit margins in time. Alibaba investors should expect top-line company growth.
Just like many of the companies listed, JD peaked in the last quarter of this year, in November. Market data currently undervalues this company. This makes it a great buy right before the new year.
Best eCommerce Penny Stocks
Exela Technologies Inc. (NADAQ:XLEA)
For a cheap buy, look no further than Exela. The company is currently trading at less than $0.40. Most similar on this list to Shopify or Bigcommerce Holdings, Exela is a business process automation company.
While not explicitly related to eCommerce, Exela does offer solutions specific to helping facilitate eCommerce logistics and facility management. Additionally, the company offers solutions specific to business intelligence, personal finance, and more. The company is projected to have massive gains for the next 12-months, making it a great investing opportunity to buy and hold for the long haul.
Should You Invest In eCommerce Stocks
Companies are rethinking strategies, especially if they were previously just involved in physical retail sales. Especially in context to the current public health crisis, by the time we arrive at the other side of all of this, it’s likely that we’ll emerge into a new world dependant upon the influence of online sales for all types of businesses.
It’s not just Amazon that’s benefitting from the trend anymore, and investors should be sure to keep the eyes set on investment opportunities, not only in the US but on a global scale.
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Best eCommerce Stocks: Final Thoughts
As the world continues to delve into new trends such as eCommerce, whether or not we’re ready: it’s here. Whether by use of mega-companies like Amazon, and eBay, or smaller, every-day retail companies, more of the products and industries we know and love will be making the transition to online sales. This transition will fuel a whole new perception of the industry, as we rethink the way we browse, pay for, and receive the products we buy such as things as simple as groceries. Get ahead of this trend and buy some eCommerce stocks today!