5 Best Gig Economy Stocks To Buy

In this article, we discuss the 5 best gig economy stocks to buy. To read the detailed analysis of the gig economy market, go directly to the 12 Best Gig Economy Stocks To Buy.

5. Shopify Inc. (NYSE:SHOP)

Number of Hedge Fund Holders: 68

Shopify Inc. (NYSE:SHOP) operates a marketplace that is the digital platform of choice for many gig workers where they set up their online stores to sell their goods and services. Shopify Inc. (NYSE:SHOP) was part of 68 hedge funds’ portfolios in Q4 of 2023 with a total stake value of $5.94 billion. GQG Partners is the most significant shareholder in the company and has a position worth $546.6 million, as of December 31, 2023.

On April 29, Citi upgraded Shopify Inc. (NYSE:SHOP) to Buy from Neutral and increased the price target to $105 from $93. It is one of the best gig economy stocks to buy.

Brown Capital Management stated the following regarding Shopify Inc. (NYSE:SHOP) in its fourth quarter 2023 investor letter:

“Among the top contributors for the fourth quarter were Shopify Inc. (NYSE:SHOP) and Manhattan Associates (MANH). Shopify is the second-largest cloud-based e-commerce software platform in the U.S., with 10% market share. Shopify provides upstarts and Fortune 500 companies alike with turnkey solutions to help individuals and businesses run their online stores. The range of services includes web design, inventory management, payment processing, analytics and reporting, among others. We believe the company is the most attractive alternative to Amazon and has an addressable market greater than $150 billion.

Shopify released stellar results this quarter, growing revenue 25% with meaningful margin expansion and management indicating more to come. Notably, the third quarter was Shopify’s first full quarter after deciding in May 2023 to abandon its in-house fulfillment and logistics ambitions which put significant pressure on margins. Additionally, competitive concerns from Amazon’s “Buy With Prime” initiative that launched in April 2022 also abated. The feature allows merchants selling outside of Amazon to access its fulfillment network and enjoy Prime benefits such as free deliveries and returns, posing a threat to Shopify’s payment-processing revenue. Instead of duking it out, Shopify and Amazon reached a partnership agreement in September that preserves customer choice and, to our knowledge, keeps Shopify’s payment revenues intact. With these key concerns in the rear-view mirror, Shopify should have a clear path to double-digit revenue growth and margin expansion for years.”

4. PayPal Holdings, Inc. (NASDAQ:PYPL)

Number of Hedge Fund Holders: 87

PayPal Holdings, Inc. (NASDAQ:PYPL) is used by freelancers all over the world for payment transactions, and the company’s subsidiary, Hyperwallet, is a payout platform from where contractors and freelancers receive payments.

On April 30, PayPal Holdings, Inc. (NASDAQ:PYPL) reported first-quarter earnings. The Q1 non-GAAP EPS was $1.40 and beat the consensus by $0.18. The revenue jumped 9.4% year-over-year to $7.7 billion, which surpassed the estimates by $180 million.

At a stake value of $2.33 billion, 87 hedge funds held positions in PayPal Holdings, Inc. (NASDAQ:PYPL). As of Q4 of 2023, Two Sigma Advisors is the largest shareholder in the company. In the quarter, the firm increased its stake by 90% to 7.496 million shares worth $460.335 million.

ClearBridge Investments stated the following regarding PayPal Holdings, Inc. (NASDAQ:PYPL) in its first quarter 2024 investor letter:

“Given our view that the overall market looks expensive, mostly due to mega cap valuations, the low likelihood that technology can continue to deliver well above market returns and an expected slowdown in economic growth, risk management has guided our recent positioning activity. We have been consistently trimming from the select bucket and redeploying into undervalued stable and cyclical names, while also being cognizant of position sizing to maintain the latitude to add to names when prices become attractive.

We were also active in adding to stable bucket investments PayPal Holdings, Inc. (NASDAQ:PYPL) and UnitedHealth Group where negative near-term sentiment led to more attractive risk/reward profiles. We added to electronic payments provider PayPal as we have growing confidence that new CEO Alex Chriss’s strategic focus areas can improve the company’s performance, particularly in the key branded business. We added to our UnitedHealth position after shares were pressured due to fears over competition among managed care providers and rising medical loss ratios in the industry. We believe the company will be able to “re-price” for higher medical costs, making this pressure transitory and we see competitive concerns as overblown.”

3. Uber Technologies, Inc. (NYSE:UBER)

Number of Hedge Fund Holders: 129

Uber Technologies, Inc. (NYSE:UBER) is one of the biggest names in the gig economy because of its successful network of connecting drivers to customers through its subsidiaries Uber, Uber Eats, Postmates, and others. The company is among the best gig economy stocks to buy.

Uber Technologies, Inc. (NYSE:UBER) has a consensus Buy rating among 35 analysts, and its average price target of $89.44 has an upside of 25.07% from the last price of $71.51, as of May 6.

In Q4 of 2023, 129 hedge funds had investments in Uber Technologies, Inc. (NYSE:UBER), with positions worth $8.74 billion. D E Shaw is the top investor in the company as of December 31, 2023, and has a position worth $886.123 million.

RiverPark Advisors stated the following regarding Uber Technologies, Inc. (NYSE:UBER) in its fourth quarter 2023 investor letter:

“Uber Technologies, Inc. (NYSE:UBER): UBER was a top contributor in the quarter following better than expected 3Q23 earnings and 4Q23 guidance. Gross bookings of $35.3 billion were up 21% year over year. Mobility gross bookings of $17.9 billion grew 30% over last year driven by a combination of product innovation and driver availability. Delivery gross bookings of $16 billion were up 16% from last year and continued to be strong throughout the quarter. 1Q Adjusted EBITDA of $1.1 billion, up $576 million year over year, was better than management’s guidance of $1 billion, and the company generated $900 million of free cash flow, up from $358 million last year. Management guided to continuing growth in 4Q Gross Bookings (23.5% growth) and Adjusted EBITDA (of $1.2 billion).

UBER remains the undisputed global leader in ride sharing, with a greater than 50% share in every major region in which it operates. The company is also a leader in food delivery, where it is number one or two in the more than 25 countries in which it operates.1 Moreover, after a history of losses, the company is now profitable, delivering expanding margins and substantial free cash flow. We view UBER as more than a ride sharing and food delivery service; we also see it as a global mobility platform with 142 million users (by comparison, Amazon Prime has 200 million members) and the ability to penetrate new markets of on-demand services, such as package and grocery delivery, travel, and hourly worker staffing. Given its $5.2 billion of unrestricted cash and $5.1 billion of investments, the company today has an enterprise value of $128 billion, indicating that UBER trades at 21x our estimates of next year’s free cash flow.”

2. Amazon.com, Inc. (NASDAQ:AMZN)

Number of Hedge Fund Holders: 293

Amazon.com, Inc. (NASDAQ:AMZN) is directly engaged in the gig economy through its various programs, including Delivery Service Partners (DSP), Amazon Flex, and Mechanical Turk, among others. Mechanical Turk allows people to earn by completing menial tasks and drivers use their own vehicles for delivery under Amazon Flex. Amazon.com, Inc. (NASDAQ:AMZN) was held by 293 hedge funds in the fourth quarter of 2023 and the stakes amounted to $50.884 billion. Fisher Asset Management is the most prominent shareholder of the company and has a position worth $6.348 billion as of the fourth quarter of 2023.

On May 2, HSBC raised the price target on Amazon.com, Inc. (NASDAQ:AMZN) to $220 from $200 and kept a Buy rating on the shares.

Ithaka US Growth Strategy stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its first quarter 2024 investor letter:

“Founded in 1994, Amazon.com, Inc. (NASDAQ:AMZN) has evolved from its early roots as an online bookstore to become one of the world’s largest eCommerce retailers. At the end of 2022 Amazon stood poised to capture ~40% of all US e-commerce sales, representing five times more share than the next closest competitor. In addition to eCommerce, Amazon Web Services (“AWS”) has become the market leader in outsourced cloud infrastructure. Further, Amazon Advertising is garnering significant share in digital advertising, particularly product placement ads, thanks to consumers beginning their product searches on Amazon’s site. Amazon’s stock appreciated on the back of stabilization of the company’s cloud computing segment and increased confidence the company would be able to contain expenses and push operating margins above prior peaks in the near-to-medium term.”

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 302

Microsoft Corporation (NASDAQ:MSFT) is involved in the gig economy through LinkedIn Corporation which provides tools and programs for freelancers to learn skills and market their services, including LinkedIn Service Marketplace, LinkedIn Learning, and others. LinkedIn Learning allows gig workers to learn skills needed in their line of work while LinkedIn Service Marketplace offers freelance-for-hire services.

On March 12, Microsoft Corporation (NASDAQ:MSFT) announced a quarterly dividend of $0.75, payable by June 13 to the shareholders of record on May 16. As of May 6, the stock has a dividend yield of 0.74%.

In the fourth quarter of 2023, 302 hedge funds had stakes in Microsoft Corporation (NASDAQ:MSFT) with total positions worth $87.3 billion. As of Q4 of 2023, the Bill & Melinda Gates Foundation Trust is the most dominant shareholder in the company and has a position worth $14.37 billion.

Ithaka Group stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its first quarter 2024 investor letter:

“Microsoft Corporation (NASDAQ:MSFT) builds best-in-class platforms and provides services that help drive small business productivity, large business competitiveness, and public-sector efficiency. Microsoft’s products include operating systems, cross-device productivity applications, server applications, software development tools, video games, and business-solution applications. The company also designs, manufactures, and sells devices, including PCs, tablets, and gaming/entertainment consoles that all integrate with Azure, its cloud computing service. In the quarter Microsoft’s stock appreciated based on excitement surrounding the company’s positioning in the generative AI market and its ability to monetize the coming wave of corporate investment in supercomputing and AI, which will be through both Azure and Microsoft Copilot, the company’s new GenAI personal assistant.”

Should you invest $1,000 in Uber Technologies, Inc. (NYSE:UBER) right now?

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Disclosure: None. You can also look at the 25 Cheap Cars That Will Make You Look Rich and 15 Best S&P 500 Dividend Stocks To Buy Now.

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