Core Growth Stocks for Your Portfolio – Amazon.com, Inc. (AMZN)

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Google Inc (NASDAQ:GOOG) is dropping hints that its planning, not just to be a leader in search, but a leader in eCommerce as well. This year the company unveiled a portfolio of new services including Google Inc (NASDAQ:GOOG) Shopping, Google Trusted Store, and Google Wallet.

Google certainly has the potential to be successful in this space. Its search engine is one of the first places people visit when they want to find a product. Google also has the scale and resources to pull it off. According to Forrester Research, online commerce sales could exceed $370 billion by 2017. If Google Inc (NASDAQ:GOOG) can grab a piece of that action, eCommerce would be a huge growth driver on top of the company’s successes in both search and mobile.

Wal-Mart Stores, Inc. (NYSE:WMT) also understand that the future of retail is online. In theory, the company could exploit its 4,000 locations to offer nation-wide delivery without the same investment Amazon has to make.

However so far that theory hasn’t played out – Wal-Mart Stores, Inc. (NYSE:WMT)’s shipping costs are still about 1.5 times that of Amazon’s and has prevented the company from gaining market share. Last year Wal-Mart.com grossed an estimated $7.7 billion compared to $61 billion for Amazon. But if Wal-Mart can fix its logistics system, eCommerce could represent a huge catalyst for the stock.

Foolish bottom line

However, both of these companies have been making attempts to enter the eCommmerce space for years – a decade in the case of Wal-Mart Stores, Inc. (NYSE:WMT) – without much success. Amazon remains the dominate player. Because of its stable position in fast-growing eCommerce category, Amazon belongs as a core holding in your portfolio.


Robert Baillieul has no position in any stocks mentioned. The Motley Fool recommends Amazon.com and Google. The Motley Fool owns shares of Amazon.com and Google.
Robert is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article 7 Core Growth Stocks for Your Portfolio – Amazon originally appeared on Fool.com is written by Robert Baillieul.

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