Better Buy: Amazon vs. Shopify
E-commerce stocks were all the rage during the early stages of the pandemic. Now that the pandemic has eased and the rapid growth of online shopping has subsided, some investors are ditching these stocks. What those hesitant investors haven't accounted for is that the shopping habits people acquired over the past few years have become just that -- habits. Smart investors should expect that the gains made by e-commerce businesses over the past few years will mostly persist.
That's good news for e-commerce giants Amazon (NASDAQ: AMZN) and Shopify (NYSE: SHOP). Amazon needs no introduction as it's the world's largest e-commerce retailer. Fewer people may know Shopify, but its software platform powers more than 1 million e-commerce stores around the world. Both stocks have taken a hit this past year based on this investor hesitancy: Amazon is down about 44.5% from its all-time high, while Shopify is down about 82%. If you go back to before the pandemic was declared, the news is just as bad. Amazon stock is up a mere 10% since March 1, 2020, and Shopify stock is down 32%. The market now values these companies at levels comparable to or lower than it did before a colossal growth catalyst massively grew their customer bases.
Is this logical? Or is the market giving investors a couple of fantastic buying opportunities?
Source Fool.com
