3 E-Commerce Stocks to Buy This Holiday Season

E-commerce is a rapidly growing industry. Which three stocks should you buy this holiday season?

| More on:
Shopping and e-commerce

Image source: Getty Images

E-commerce is a rapidly growing industry. The COVID-19 pandemic has also done a lot in terms of accelerating its penetration around the world. As a result, e-commerce companies have been thriving. Many retail companies are also realizing that consumers are starting to prefer the convenience of online shopping and are shifting operations towards those streams of revenue. In this article, I’ll discuss three e-commerce stocks to buy this holiday season. These three companies could thrive over the next decade.

A leading enabler of the e-commerce industry

No matter how you look at it, Shopify (TSX:SHOP)(NYSE:SHOP) is one of the most important e-commerce companies in the world. The company provides a platform and all the tools necessary for business owners to operate online stores. Due to its ease of use and breadth of offerings, merchants of all sizes can find the right solutions to make their e-commerce endeavours successful. Today, you can find everything from handmade clothing stores to Netflix’s official merchandise being supported by Shopify’s platform.

Shopify stock has already made investors much richer since its IPO. Over the past six-and-a-half years, Shopify stock has gained more than 5,200%. That represents a compound annual growth rate of about 84%. As expected by the law of large numbers, Shopify’s growth rate has slowed down over the years. However, it still manages to report impressive numbers. Over the Black Friday-Cyber Monday weekend, Shopify recorded US$6.3 billion in sales. That represents a 23% increase over the previous year. Shopify still has a lot of growth ahead.

This company recognizes the importance of following the crowd

Aritzia (TSX:ATZ) is known by many as an everyday luxury retailer that can be found in many local malls. In fact, as of October 2021, Aritzia operates 104 boutiques across North America. However, the company’s management team has noticed a massive shift in consumer behaviour. Thus, Aritzia has quickly ramped up its e-commerce efforts over the past few years and now sells merchandise to customers in 221 countries.

Aritzia’s e-commerce growth is very impressive. From 2016 to 2020, its e-commerce revenue grew at a CAGR of 36%. In 2020, online sales also made up 23% of Aritzia’s total revenue. However, in 2021, the company’s e-commerce numbers skyrocketed. This year, Aritzia reported an 88% year-over-year increase in online sales. E-commerce revenue now accounts for 50% of the company’s total sales. Aritzia is a great example of a company that has managed to follow secular trends. The stock’s 103% year-to-date gain shows investors what could happen if you can recognize these trends as well.

Companies will need payment processors

No matter how many consumers desire to shop online, it’ll never happen if businesses don’t have a way to accept payments. That’s where payment processors like Nuvei (TSX:NVEI)(NASDAQ:NVEI) come into play. The company offers merchants with an omnichannel payments platform. Using its platform, businesses are able to accept online, mobile, in-store, and unattended payments.

While it’s true that Nuvei’s business isn’t solely focused on the e-commerce industry, I find that to be a positive. Nuvei has focused a lot of its recent growth efforts into expanding within the rapidly growing sports betting industry. Through these two main verticals, Nuvei should see significant growth over the next decade.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Jed Lloren owns Shopify. The Motley Fool owns and recommends Nuvei Corporation and Shopify. The Motley Fool recommends Netflix.

More on Tech Stocks

grow dividends
Tech Stocks

Beyond Shopify: This Lesser-Known Canadian Growth Stock Is Set to Soar

Shopify (TSX:SHOP) stock may still be on the rise, but it won't rise by much anytime soon. However, this other…

Read more »

Tech Stocks

Shopify Stock or Constellation Software: What’s the Better Buy?

Constellation Software (TSX:CSU) and Shopify (TSX:SHOP) are worthy Canadian tech stocks worth a watch going into June 2023.

Read more »

Money growing in soil , Business success concept.
Tech Stocks

1 Dirt-Cheap Growth Stock I’ve Been Drip-Feeding in 2023

This growth stock is up 58% in 2023 alone but has so much more room to grow if analysts are…

Read more »

a person watches a downward arrow crash through the floor
Tech Stocks

Nuvei Stock Is on Fire This Year: Is It a Good Buy Today? 

Nuvei stock jumped 65% and then plunged 25% in five months. What tipped the rally and the dip? Is it…

Read more »

Paper airplanes flying on blue sky with form of growing graph
Tech Stocks

Investing in Growth? These TSX Stocks Have the Potential to Soar

These three TSX stocks have so much more room to run for investors wanting to get in on a deal…

Read more »

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Tech Stocks

Don’t Forget About Shopify Stock! Here’s Why More Gains Could Be Coming

Shopify (TSX:SHOP) stock is back on the retreat and may be a worthy dip buy for investors who missed the…

Read more »

bulb idea thinking
Tech Stocks

Maxar Technologies: Is Space the Next Investing Frontier?

Maxar Technologies was acquired but there are other alternatives.

Read more »

Mature financial advisor showing report to young couple for their investment
Tech Stocks

Want $1 Million for Retirement? Invest $50,000 in These 2 Stocks and Wait a Decade

Investing in quality growth stocks such as Nuvei can help investors turn a $50,000 investment into $1 million within a…

Read more »