In this article, we will look at the 12 Best E-Commerce Stocks to Buy According to Analysts.
The E-Commerce Sector and the Shift to Mobile
According to a report by Forbes, the e-commerce industry is expected to grow its valuation from $6.3 trillion in 2024 to $7.9 trillion by 2027. In 2027, 23% of retail purchases are expected to be made online, up from 20.1% in 2024.
American consumers are showing an increasing inclination toward e-commerce and online shopping. On December 26, Michael Zakkour, 5 New Digital founder, appeared on ‘Squawk Box’ to discuss the rise of mobile e-commerce sales, among other things. He said that roughly 25% of all holiday sales happened online in the 2024 holiday shopping season, which translates to a significant year-over-year increase. Black Friday was up 10% online year-on-year, while Cyber Monday was up 13.1%. These numbers highlight that the online sector has grown its share of the pie. Mastercard’s survey of the holiday shopping season further showed that online shopping grew 6.7% in 2024 from a year ago.
Mobiles are a becoming dominant force in this domain. Zakkour said that around 40% of all sales in e-commerce happened on mobiles. He predicted that this number is bound for a significant increase, with around 70% of all e-commerce sales expected to happen on mobiles next year. Zakkour warned that if brands or retailers do not shift their attention to optimizing their businesses for mobile, they will likely have difficulty getting through to consumers next year.
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Trump’s Tariffs: What Do They Mean for the E-commerce Sector?
US President Donald Trump recently announced significant tariffs on the country’s three biggest trading partners: China, Mexico, and Canada. Mexico and Canada will face 25% duties on exports to the United States, while Chinese goods will face a lower number of 10%. Canada has already responded to Trump’s tariffs with retaliatory tariffs of 25% against $155 billion of US goods, according to CNBC.
According to analysts at Morgan Stanley, Chinese companies are among the entities facing the highest risk from these tariffs and the consequent changes in access to the US market. Widely popular China-linked online shopping platforms such as AliExpress, Shein, and Temu may be hit hard by the effects of these tariffs. This is primarily because President Trump has halted a trade exemption called “de minimis,” which previously allowed the duty-free shipment of packages worth less than $800 into the US.
As per claims by US officials, this exemption provided ground for Chinese e-commerce companies to undercut their competition. They also brought to light safety concerns due to the “minimal documentation and inspection” of these imports. According to US Customs and Border Protection Agency statistics, around 1.3 billion “de minimis” shipments were processed in the United States in 2024 alone.
Without “de minimis,” low-cost and high-volume products from online Chinese retailers will face taxes, which may increase the end price of the items, ultimately decreasing their demand.
With these trends in view, let’s look at the 12 best e-commerce stocks to buy according to analysts.
Photo by CardMapr.nl on Unsplash
Our Methodology
We sifted through stock screeners, online rankings, and ETFs to compile a list of 20 e-commerce stocks. We then selected the top 12 stocks with the highest analyst upside potential as of February 3rd, 2024. We also added the number of hedge fund holders for each company, and sourced hedge fund data from Insider Monkey’s database. The stocks are sorted in ascending order of their analyst upside potential.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
12 Best E-Commerce Stocks to Buy According to Analysts
12. PDD Holdings Inc. (NASDAQ:PDD)
Analyst Upside: 33.70%
Number of Hedge Fund Holders: 78
PDD Holdings Inc. (NASDAQ:PDD) is a Chinese multinational online commerce group and retailer that owns and operates a range of diverse businesses. It also has a strong logistics, sourcing, and fulfillment capabilities network that supports its operations. The company owns Pinduoduo, a popular online commerce platform in China, and also runs the fast-growing e-commerce marketplace Temu. Temu now operates in more than 50 countries worldwide.
Analysts are bullish on PDD Holdings Inc. (NASDAQ:PDD) and expect it to grow at a compound annual growth rate of 38% to 2026, driven by market share gains in China. Its continued expansion into international markets through the Temu platform is anticipated to accelerate and support this growth. Temu connects Chinese sellers and overseas buyers, allowing PDD Holdings Inc. (NASDAQ:PDD) to diversify its revenue base. It also holds a competitive advantage due to its group-buying model from small and medium businesses, which helps its listings to be cheaper than its competitors.
PDD Holdings Inc. (NASDAQ:PDD) is also focused on a high-quality development strategy and has been actively optimizing its platform ecosystem to deliver impactful results over the long run. This strategy has helped the company report impressive financial results. It reported a 44% increase in revenue in fiscal Q3 2024, and its operating profit in the quarter also surged 46% year-over-year.
GreenWood Investors stated the following regarding PDD Holdings Inc. (NASDAQ:PDD) in its Q4 2024 investor letter:
“Aside from transitory foreign exchange translation losses (as opposed to trading losses), the two other notable detractors from our portfolio were MEI Pharma and PDD Holdings Inc. (NASDAQ:PDD) in 2024.
PDD Holdings founder Colin Huang is who inspired us to “run 3x faster,” as the relentless corporate culture of PDD has built an e-commerce company with roughly the same GMV (gross merchandise value) of Amazon in one-third the time it took Amazon to build itself. Shares reacted negatively when the company decided to reinvest its record margins into even faster growth and creating a healthier supplier ecosystem. As it looks set to create a second Amazon with its international site Temu, we are highly attracted to the opportunity. Sales are growing 4x faster than Amazon’s, yet shares are priced at less than a quarter of the Amazon earnings multiple.
PDD is a perfect example of why we want to look outside of the “Big Ten” companies that are nearly a third of global market indices. We would not want to compete with the demanding corporate culture of PDD and Temu. Its operating model is relentless at identifying efficiency throughout the manufacturing and selling supply chain. Not only is it a more formidable competitor than Amazon, and growing much faster, but the valuation is 4x more attractive than Amazon’s…” (Click here to read the full text)
11. BigCommerce Holdings, Inc. (NASDAQ:BIGC)
Analyst Upside: 39.57%
Number of Hedge Fund Holders: 20
BigCommerce Holdings, Inc. (NASDAQ:BIGC) develops software-as-a-service (SaaS) technology solutions and has a SaaS platform that enables, launches, and scales e-commerce operations. It powers the branded e-commerce stores of its customers and their cross-channel connections to social networks, online marketplaces, and offline point-of-sale systems. The company’s operations span various business lines, including small, mid-market, and enterprise businesses.
BigCommerce Holdings, Inc. (NASDAQ:BIGC) reported just under $84 million in total revenue in fiscal Q3 2024, reflecting a 7% growth year-over-year. Its subscription revenue also grew by 7% yearly to around $63 million, which shows its continued popularity. The company is focusing on driving efficient revenue growth and is significantly reducing investments in underperforming channels. It also has plans to nearly double its quota-carrying sales capacity in fiscal 2025.
In addition, BigCommerce Holdings, Inc. (NASDAQ:BIGC) is focusing on driving operating leverage. It has made changes in leadership to support these goals, bringing industry veterans to key leadership roles to align the company with its strategic objectives. It takes the 11th spot on our list of the 12 best e-commerce stocks to buy according to analysts.
