In this article, we discuss 15 best ecommerce stocks to buy now.
The global ecommerce marketplace was one of the biggest winners of the coronavirus pandemic at the stock market. However, as the pandemic has waned, so have sales for online shopping stocks. This slowdown has coincided with a macro environment in which soaring inflation, rising interest rates, and bloated inventories are exacerbating the slump in the ecommerce world. However, top economic experts remain bullish on the industry. According to a report by Morgan Stanley, the global ecommerce market will be worth $5.4 trillion in 2026.
For context, presently, the global ecommerce marketplace is worth around $3.3 trillion. Per the analysts at Morgan Stanley, this growth will be driven by logistics, mobile device ownership, and marketplace expansion. Brian Nowak, an equity analyst covering the US internet industry, believes that across the world, economic models are yet to predict a ceiling for e-commerce penetration. Some of the top stocks in the sector include Amazon.com, Inc. (NASDAQ:AMZN), Alibaba Group Holding Limited (NYSE:BABA), and PayPal Holdings, Inc. (NASDAQ:PYPL).
Our Methodology
The companies that operate in the ecommerce sector were selected for the list. The analyst ratings of these firms and the latest updates related to them are also discussed to provide some additional context. Data from around 900 elite hedge funds tracked by Insider Monkey in the second quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.
Photo by CardMapr.nl on Unsplash
Best Ecommerce Stocks to Buy Now
15. Waterdrop Inc. (NYSE:WDH)
Number of Hedge Fund Holders: 1
Waterdrop Inc. (NYSE:WDH) provides online insurance brokerage services to match and connect users with related insurance products underwritten by insurance companies in China. It is one of the best ecommerce stocks to invest in. On July 21, Waterdrop declared a partnership with China United Insurance Company Limited and Young an Insurance for the launch of the Waterdrop Blue Ocean. This is a series of cost-effective critical illness products with a waiver on health declarations.
On September 16, Morgan Stanley analyst Jenny Jiang upgraded Waterdrop (NYSE:WDH) stock to Overweight from Equal Weight with a price target of $2.10, up from $2, noting that the company’s revenue continued to recover sequentially and earnings have been positive for the past three quarters.
At the end of the second quarter of 2022, 1 hedge fund in the database of Insider Monkey held a position worth $95,000 in Waterdrop Inc. (NYSE:WDH), compared to 4 in the previous quarter worth $165,000.
Just like Amazon.com, Inc. (NASDAQ:AMZN), Alibaba Group Holding Limited (NYSE:BABA), and PayPal Holdings, Inc. (NASDAQ:PYPL), Waterdrop Inc. (NYSE:WDH) is one of the best ways to play the boom in the ecommerce sector.
14. FIGS, Inc. (NYSE:FIGS)
Number of Hedge Fund Holders: 21
FIGS, Inc. (NYSE:FIGS) operates as a direct-to-consumer healthcare apparel and lifestyle company in the United States. On August 25, the stock jumped after billionaire Ron Baron said that he has been purchasing shares of the company. He also called the firm “the Lululemon of healthcare”. Baron Capital owns 2.4 million shares of FIGS as of the end of June.
On August 5, Barclays analyst Adrienne Yih maintained an Overweight rating on FIGS, Inc. (NYSE:FIGS) stock and raised the price target to $15 from $13, noting that the company’s Q2 earnings were better than expected.
At the end of the second quarter of 2022, 21 hedge funds in the database of Insider Monkey held stakes worth $111.6 million in FIGS, Inc. (NYSE:FIGS), compared to 18 the preceding quarter worth $126.8 million.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and FIGS, Inc. (NYSE:FIGS) was one of them. Here is what the fund said:
“Figs Inc. (NYSE:FIGS) is a direct-to-consumer health care apparel brand. The stock price fell in the earlier part of the quarter due to a combination of poor market conditions for newly public companies and a reduction in guidance given the volatile backdrop for consumer spending. Shares contributed during the period owned after we took advantage of the weakness to initiate a position. We like Figs’ long-term growth prospects as the company disrupts the commoditized and unbranded scrubs industry with its superior, premium product offering.”
13. Chewy, Inc. (NYSE:CHWY)
Number of Hedge Fund Holders: 25
Chewy, Inc. (NYSE:CHWY) engages in the pure play e-commerce business in the United States. It is one of the top ecommerce stocks to invest in. On September 21, Chewy announced that it has launched a new 795,000 square feet fulfillment center in North Reno which allows the company to better serve customers across the West and pet owners living in the Pacific Northwest. This is the 13th fulfillment center of Chewy.
On October 6, Oppenheimer analyst Rupesh Parikh initiated coverage of Chewy, Inc. (NYSE:CHWY) stock with an Outperform rating and a $42 price target, noting that the company’s shares were down 70% from all-time highs.
At the end of the second quarter of 2022, 25 hedge funds in the database of Insider Monkey held stakes worth $288.5 million in Chewy, Inc. (NYSE:CHWY), compared to 21 the preceding quarter worth $175.4 million.
In its Q2 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Chewy, Inc. (NYSE:CHWY) was one of them. Here is what the fund said:
“We exited our position in Chewy, Inc. (NYSE:CHWY), in the consumer discretionary sector. While we continue to have a favourable opinion of the online pet products retailer, we decided to consolidate our exposure to the pet industry.”
12. Etsy, Inc. (NASDAQ:ETSY)
Number of Hedge Fund Holders: 29
Etsy, Inc. (NASDAQ:ETSY) operates two-sided online marketplaces that connect buyers and sellers. On October 17, Etsy announced that it is running tests with Printify and Shutterfly to promote printing and framing for people who buy digital products. Etsy will only show buyers what is in ad for those services by just selling digital items in its marketplace.
On October 10, BTIG analyst Marvin Fong maintained a Buy rating on Etsy, Inc. (NASDAQ:ETSY) stock and lowered the price target on Etsy to $119 from $122, noting that the company’s Q3 results show sequential growth.
At the end of the second quarter of 2022, 29 hedge funds in the database of Insider Monkey held stakes worth $595.9 million in Etsy, Inc. (NASDAQ:ETSY), compared to 43 in the preceding quarter worth $668.5 million.
In its Q2 2022 investor letter, Oakmark Funds, an asset management firm, highlighted a few stocks and Etsy, Inc. (NASDAQ:ETSY) was one of them. Here is what the fund said:
“We became interested in Etsy (NASDAQ:ETSY) when Josh Silverman took over as CEO in 2017. The company had long been recognized as a great marketplace, but prior management was not focused on maximizing shareholder value. In short order, Silverman transformed Etsy from a borderline non-profit into a higher-margin, faster-growing enterprise. The pandemic helped accelerate already strong fundamental business results as millions of new customers were introduced to the platform while stuck at home. But like so many other Covid-19 “winners,” Etsy has since fallen deeply out of favor with investors, which prompted us to take a closer look. Following a 75% decline in its stock price, the company now trades for 3.5x next year’s revenue or just a low double-digit multiple of operating profit using our estimate of normalized margins. We believe this is an attractive price to pay for a unique digital marketplace with a long runway for future growth. Note that our exposure to Etsy is currently established via options.”
11. DoorDash, Inc. (NYSE:DASH)
Number of Hedge Fund Holders: 31
DoorDash, Inc. (NYSE:DASH) operates a logistics platform that connects merchants, consumers, and dashers in the United States and internationally. It is one of the elite ecommerce stocks to invest in. On August 29, DoorDash stated that it has partnered with RELEX, a supply chain and retail planning solutions firm. Under the deal, the AI-driven supply chain planning solution of RELEX will be implemented to service DoorDash’s DashMart locations.
On August 23, Wolfe Research analyst Deepak Mathivanan reiterated an Outperform rating on DoorDash, Inc. (NYSE:DASH) stock with a $110 price target, highlighting that the company’s underlying fundamentals were solid with significant profitability growth at the core of the US restaurant business.
Among the hedge funds being tracked by Insider Monkey, Beijing-based investment firm Hillhouse Capital Management is a leading shareholder in DoorDash, Inc. (NYSE:DASH), with 4.7 million shares worth more than $301 million.
10. Coupang, Inc. (NYSE:CPNG)
Number of Hedge Fund Holders: 37
Coupang, Inc. (NYSE:CPNG) owns and operates an e-commerce business through its mobile applications and Internet websites primarily in South Korea. On September 22, Coupang partnered up with ShipStation, a cloud-based ecommerce shipping solution. Shipstation is the first US shipping partner to integrate with Coupang. This partnership will enable US-based merchants to efficiently ship and sell products in the Coupang marketplace.
On October 7, investment advisory HSBC initiated coverage of Coupang, Inc. (NYSE:CPNG) stock with a Buy rating and a $27.80 price target. Analyst Junhyun Kim issued the ratings update.
Among the hedge funds being tracked by Insider Monkey, Dallas-based investment firm Maverick Capital is a leading shareholder in Coupang, Inc. (NYSE:CPNG), with 84.5 million shares worth more than $1 billion.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Coupang, Inc. (NYSE:CPNG) was one of them. Here is what the fund said:
“During the quarter, we also added to our position in the leading Korean e-commerce player, Coupang, Inc. (NYSE:CPNG), taking advantage of the stock’s volatility. While the stock sold off, the business remains robust, growing revenues by 32% in the most recent quarter (year-over-year in constant currency) while gaining market share (the industry grew 8%) and reaching profitability in its product commerce segment three quarters ahead of plan.”
9. eBay Inc. (NASDAQ:EBAY)
Number of Hedge Fund Holders: 43
eBay Inc. (NASDAQ:EBAY) operates marketplace platforms that connect buyers and sellers in the United States and internationally. It is one of the major ecommerce stocks to invest in. On October 18, eBay revealed that it has partnered up with the British Fashion Council for the launch of Circular Fashion Innovators Fund that is offering $113,000 in funding for small businesses in circular fashion solutions.
On October 6, Jefferies analyst John Colantuoni maintained a Hold rating on eBay (NASDAQ:EBAY) stock and lowered price target to $42 from $52, noting that the company is leaning on a new risk/reward strategy to achieve long term profit.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Harris Associates is a leading shareholder in eBay Inc. (NASDAQ:EBAY), with 4.89 million shares worth more than $203.8 million.
In its Q2 2022 investor letter, Smead Capital Management, an asset management firm, highlighted a few stocks and eBay Inc. (NASDAQ:EBAY) was one of them. Here is what the fund said:
“We believe you need to avoid these formerly glamorous stock groups for many years. We loved to use eBay Inc. (NASDAQ:EBAY) as a poster child back in 1999 for the dotcom bubble. We bought it eight years later and have done very well on it. We wouldn’t have done well if we bought it in the early years of that bear market, or even five years later. If you think this bear will be shorter and or less damaging than the dotcom bear market of 2000-2003, you could be showing your inexperience!”
8. Shopify Inc. (NYSE:SHOP)
Number of Hedge Fund Holders: 60
Shopify Inc. (NYSE:SHOP) is a commerce company that provides an e-commerce platform and services. On October 19, Shopify stated that it is in partnership with Novel, a no code Web3 commerce platform, to make Web3 technologies accessible and approachable for all merchants. Novel launched an app on Shopify which enables the merchants to experience Web3 innovation without any technical knowledge.
On September 20, Morgan Stanley analyst Keith Weiss maintained an Equal Weight rating on Shopify Inc. (NYSE:SHOP) stock and lowered the price target to $40 from $44, noting that there was a difficult path to significant operating profitability rather than an accretive contributor to earnings power for the firm.
Among the hedge funds being tracked by Insider Monkey, Florida-based investment firm ARK Investment Management is a leading shareholder in Shopify Inc. (NYSE:SHOP), with 14.5 million shares worth more than $391.5 million.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Shopify Inc. (NYSE:SHOP) was one of them. Here is what the fund said:
“Shopify Inc. (NYSE:SHOP) is a cloud-based software provider offering an operating system for multi-channel commerce. Shares fell due to continued post-pandemic e-commerce normalization as economies reopen, concerns about competition following Amazon’s announcement of Buy with Prime, as well as the broader sell-off in growth stocks. We remain shareholders due to Shopify’s strong competitive positioning, innovative culture, and long runway for growth as it currently addresses less than 1% of global commerce spend.”
7. JD.com, Inc. (NASDAQ:JD)
Number of Hedge Fund Holders: 62
JD.com, Inc. (NASDAQ:JD) provides supply chain-based technologies and services in China. It is one of the prominent ecommerce stocks to invest in. On October 11, Citi analyst Alicia Yap maintained a Buy rating on JD.com, Inc. (NASDAQ:JD) stock and lowered the price target to $85 from $91, highlighting that China’s underlying economic activities and consumption willingness remain weak and the soft sentiment had led to decreasing Q4 earnings of the firm.
At the end of the second quarter of 2022, 62 hedge funds in the database of Insider Monkey held stakes worth $5.5 billion in JD.com, Inc. (NASDAQ:JD), compared to 59 in the previous quarter worth $5.4 billion.
In its Q3 2021 investor letter, Argosy Investors, an asset management firm, highlighted a few stocks and JD.com, Inc. (NASDAQ:JD) was one of them. Here is what the fund said:
“We sold JD.com, Inc. (NASDAQ:JD) as a result of the furor over Chinese stocks during the quarter. We had been concerned about China’s lack of respect for investor rights for some time, and Beijing has become significantly more aggressive in asserting itself of late. In addition, the legal structure Chinese companies use to come public in the U.S., a Cayman Islands shell corporation leaves American investors with an unsure path to recovering value should these companies cease to trade on U.S. exchanges. Because of the uncertainty, we exited our position in JD completely. We still love JD’s long-term prospects, but we cannot estimate the legal/regulatory risk associated with these companies anymore. More broadly, we are freeing up cash for some other positions we already own which have declined in this market, and after additional review, remain attractive.”
6. Sea Limited (NYSE:SE)
Number of Hedge Fund Holders: 65
Sea Limited (NYSE:SE) engages in the digital entertainment, e-commerce, and digital financial services businesses. On August 18, Barclays analyst Jiong Shao maintained an Overweight rating on Sea Limited (NYSE:SE) stock and lowered the price target to $114 from $125, noting that many macro factors, currency headwinds, and inflation had led the firm to withdraw fiscal 2022 revenue guidance.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Tiger Global Management is a leading shareholder in Sea Limited (NYSE:SE), with 8.2 million shares worth more than $548 million.
In addition to Amazon.com, Inc. (NASDAQ:AMZN), Alibaba Group Holding Limited (NYSE:BABA), and PayPal Holdings, Inc. (NASDAQ:PYPL), Sea Limited (NYSE:SE) is one of the best ways to play the boom in the ecommerce sector.
In its Q1 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Sea Limited (NYSE:SE) was one of them. Here is what the fund said:
“Sea Limited (NYSE:SE), a global digital gaming and e-commerce company, detracted from performance for the period held. Similar to other online consumer businesses, Sea faced significant multiple compression in the quarter, exacerbated by a slowdown in user growth at its key Free Fire digital game and mounting investments in its e-commerce operation, particularly in new markets like Brazil. We exited our position as we lost confidence in the long- term unit economics in some of Sea’s new markets and were concerned by the simultaneous slowdown in revenue growth and increase in underlying cash burn.”
5. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 67
Walmart Inc. (NYSE:WMT) engages in the operation of retail, wholesale, and other units worldwide. It is one of the major ecommerce stocks to invest in. On October 18, Walmart revealed that it has launched a new content creator platform, Walmart Creators, in partnership with Creators. Users will be able to share product links to any social platform and they will also receive product recommendations based on their interests.
On October 18, Jefferies analyst Corey Tarlowe maintained a Buy rating on Walmart Inc. (NYSE:WMT) stock and raised the price target to $165 from $161, noting that the company is well positioned in the present environment.
Among the hedge funds being tracked by Insider Monkey, Florida-based investment firm GQG Partners is a leading shareholder in Walmart Inc. (NYSE:WMT), with 9.8 million shares worth more than $1.2 billion.
In its Q2 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Walmart Inc. (NYSE:WMT) was one of them. Here is what the fund said:
“The pandemic has created challenges for businesses large and small; one major challenge for large essential retailers such as ClearBridge holdings Home Depot, Walmart Inc. (NYSE:WMT) and Costco has been ensuring adequate staffing to meet demand under trying conditions. All three instituted enhanced pay practices during the pandemic, with raises, unplanned bonuses and other benefits helping compensate employees for their efforts in a difficult environment. In September 2020 Walmart raised wages for 165,000 employees, including a number of entry positions to $15 an hour. It followed this in February with a raise for 425,000 workers that moved its average pay above $15 an hour.”
4. MercadoLibre, Inc. (NASDAQ:MELI)
Number of Hedge Fund Holders: 68
MercadoLibre, Inc. (NASDAQ:MELI) operates online commerce platforms in Latin America. It is one of the elite ecommerce stocks to invest in. On October 6, Jefferies analyst John Colantuoni maintained a Hold rating on MercadoLibre, Inc. (NASDAQ:MELI) stock and lowered the price target to $970 from $990, noting that the reduced estimates and price targets reflected the slowing macro environment.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in MercadoLibre, Inc. (NASDAQ:MELI), with 934,000 shares worth more than $594.8 million.
In its Q2 2022 investor letter, Polen Capital, an asset management firm, highlighted a few stocks and MercadoLibre, Inc. (NASDAQ:MELI) was one of them. Here is what the fund said:
“As written in our Q4 2021 commentary, some significant differences exist between the underlying profitability of ecommerce companies in emerging markets. However, MercadoLibre, Inc. (NASDAQ:MELI) was punished during the quarter in part because of the sector it happens to operate in. Given its robust cash flow generation, we believe MercadoLibre is well-poised to continue delivering solid cash flows that will enable it to support its operations fully. Going forward, we expect the business to continue growing and providing value-added services to its customers across the continent. In turn, we capitalized on the weakness during the quarter to opportunistically increase our position in MercadoLibre.”
3. PayPal Holdings, Inc. (NASDAQ:PYPL)
Number of Hedge Fund Holders: 97
PayPal Holdings, Inc. (NASDAQ:PYPL) operates a technology platform that enables digital payments on behalf of merchants and consumers worldwide. It is one of the premier ecommerce stocks to invest in. On October 18, PayPal announced a program for customers to shop while earning, tracking, saving, and redeeming rewards. PayPal Honey extension will remain in place and Honey Gold Rewards will become PayPal Rewards. This will help the customers to simplify rewards tracking and redemption across the platform products.
On October 12, Atlantic Equities analyst Kunaal Malde maintained an Overweight rating on PayPal Holdings, Inc. (NASDAQ:PYPL) stock and lowered the price target to $110 from $120, noting that the US and global economies will likely enter recession in 2023.
Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in PayPal Holdings, Inc. (NASDAQ:PYPL), with 17 million shares worth more than $1.2 billion.
In its Q2 2022 investor letter, Mayar Capital, an asset management firm, highlighted a few stocks and PayPal Holdings, Inc. (NASDAQ:PYPL) was one of them. Here is what the fund said:
“This quarter, we bought shares in PayPal (NASDAQ:PYPL), the payments platform. PayPal has been one of the more high-profile victims of the market’s brutal ruthlessness over the past few months, and the stock fell by over two thirds between its peak in July to the beginning of March this year. As we progressed PayPal through the Mayar Checklist Process, we identified a business with a leadership position in a structurally growing market.
The company benefits from certain network effects, and faces several competitive threats at the same time. As the business profited from the move to online retail during the pandemic, as well as from the stimulus cheques handed out in the US, the stock price soared to absurd levels. As so often happens, however, the market had overcorrected by February and this quarter was offering prospective shareholders prices that assumed essentially zero growth in the business. When life gives you irrational sellers, make lemonade!”
2. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Holders: 106
Alibaba Group Holding Limited (NYSE:BABA) provides technology infrastructure and marketing reach to help merchants, brands, retailers, and other businesses. It is one of the top ecommerce stocks to invest in. On October 17, Alibaba announced that it had invested in an open new cloud computing campus for its cloud computing unit, Alibaba Cloud, in Hangzhou. The new campus is roughly the size of Google’s Silicon Valley in California.
On September 30, Morgan Stanley analyst Gary Yu maintained an Overweight rating on Alibaba Group Holding Limited (NYSE:BABA) stock and lowered the price target to $110 from $140.
Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Alibaba Group Holding Limited (NYSE:BABA), with 14 million shares worth more than $1.6 billion.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Alibaba Group Holding Limited (NYSE:BABA) was one of them. Here is what the fund said:
“Alibaba Group Holding Limited (NYSE:BABA) is the largest retailer and e-commerce company in China. Alibaba operates shopping platforms Taobao and Tmall and owns 33% of Ant Group, which operates Alipay, China’s largest third party online payment provider. Shares of Alibaba rose during the quarter, driven by an increasing focus on improving capital allocation, an improving regulatory environment, and government stimulus targeting Chinese consumers. We retain conviction that Alibaba will benefit from rapid growth in cloud services, logistics, and retail.”
1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 252
Amazon.com, Inc. (NASDAQ:AMZN) engages in the retail sale of consumer products and subscriptions in North America and internationally. It is one of the best ecommerce stocks to invest in. On October 18, the Cloud computing unit of Amazon announced that it has invested $5 billion to strengthen Thailand’s cloud infrastructure over the next 15 years. The plan involves the purchase of goods and the construction of data centers.
On October 17, Cowen analyst John Blackledge maintained an Outperform rating on Amazon.com, Inc. (NASDAQ:AMZN) stock and lowered the price target to $195 from $214.
At the end of the second quarter of 2022, 252 hedge funds in the database of Insider Monkey held stakes worth $30 billion in Amazon.com, Inc. (NASDAQ:AMZN), compared to 271 the preceding quarter worth $48 billion.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Amazon.com, Inc. (NASDAQ:AMZN) was one of them. Here is what the fund said:
“Amazon.com, Inc.(NASDAQ:AMZN) is the world’s largest retailer and cloud services provider. Shares of Amazon declined 35% in the quarter due to weaker-than-expected profits resulting from an overcapacity of resources coming out of COVID. We expect Amazon to grow into its retail capacity in the quarters to come, which would enable it to improve profitability accordingly. Amazon remains one of our largest holdings due to its durable competitive advantages with a leading position in multiple trillion-dollar markets with a long runway for growth (…read more)
You can also take a peek at 10 Best MLP Dividend Stocks to Buy and 10 Best Stocks to Buy According to Billionaire Dan Loeb.
Follow Insider Monkey on Twitter
Suggested Articles:
- 20 Cheapest States To Live In The US
- 10 Best Money Making Stocks To Invest In
- 10 Warren Buffett Stocks That Are Too Cheap To Ignore
Disclosure. None. 15 Best Ecommerce Stocks to Buy Now is originally published on Insider Monkey.
