5 Best E-Commerce Stocks to Invest In

In this article, we will take a look at the 5 best eCommerce stocks to invest in. To see more such companies, go directly to 15 Best eCommerce Stocks to Invest In.

5. Shopify Inc. (NYSE:SHOP)

Number of Hedge Fund Holders: 74

Canadian ecommerce giant Shopify Inc. (NYSE:SHOP) ranks 5th in our list of the best ecommerce stocks to buy now. Shopify Inc. (NYSE:SHOP) was moving recently after the company signed a deal with Amazon after which Shopify store owners will be able to give an option to Buy with Amazon Prime in their stores.

A total of 74 hedge funds out of the 910 funds in Insider Monkey’s database had stakes in Shopify Inc. (NYSE:SHOP). The most significant stakeholder of Shopify Inc. (NYSE:SHOP) was Catherine D. Wood’s ARK Investment Management which had a $573 million stake in the company.

RiverPark Large Growth Fund made the following comment about Shopify Inc. (NYSE:SHOP) in its Q2 2023 investor letter:

“Shopify Inc. (NYSE:SHOP): Shopify shares were a top contributor in the quarter following strong 1Q results and the announced divestiture of its logistics business. Gross Merchandise Volume (GMV) grew 15% year over year as e-commerce sales broadly rebounded and Shopify continued to take market share. Revenue grew 25% driven by increased merchant adoption of multiple products, especially Shop Pay. The company generated $86 million of free cash flow, up from a $46 million loss last year, and announced expectations to be free cash flow positive for each quarter for the rest of the year. The company had previously announced several cost savings plans, which are driving margin and free cash flow improvement, and now plans to divest its capital-intensive logistics arm. Faster growing revenue, lower operating expenses, and a less capital-intensive future were all cheered on by the market.

Last year, 10% of US retail e-commerce sales flowed through SHOP, second only to Amazon, and the company is still enjoying significant tailwinds as retail merchants of all sizes adopt SHOP’s software tools to display, manage and sell their products across a dozen different sales channels. We believe that the overall growth of e-commerce, combined with the development of new products and services, such as its digital wallet Shop Pay, should continue to drive revenue growth of more than 20% per year over the next several years, accompanied by re-acceleration of operating margin growth and FCF generation.”