Turbulence has returned to the tech scene over the past few weeks. And although the impressive first half of gains for the tech titans may be hard to top moving forward, I do think the tech plays are still worth considering should markets continue to stumble into late September.
At this juncture, e-commerce stocks, like Shopify (TSX: SHOP) and Amazon (NASDAQ: AMZN), look like impressive plays to keep a close watch on. Undoubtedly, the two e-tail plays recently came to an agreement regarding “Buy with Prime.” Shopify stock actually surged higher, as news broke that the Shopify platform would integrate Amazon’s potentially disruptive “Buy with Prime” service.
Shopify and Amazon partner on “Buy with Prime.”
Indeed, the two e-commerce combatants may be playing nicely for now. Shopify’s decision to offload its logistics businesses represents a remarkable transition that investors have applauded. Despite recent cooperation, don’t expect Shopify and Amazon to be too friendly as they look to dominate all corners of the e-commerce market.
Despite Amazon’s dominance, Shopify has shown it can compete and hold its own with the heavyweights. How much longer can Shopify stay competitive as it punches up a weight class? It’s tough to tell. Regardless, I’d not be surprised if the stock adds to its current rally en route to $100 per share.
As for Amazon, the stock could have the most room to gain relative to its mega-cap tech peers. The stock surged 3.5% on a hot Monday. Still, shares remain off more than 25% from their 2021 peak levels. Could such highs be hit later this year? I’d argue it’s possible as the company continues betting big on the artificial intelligence (AI) trend.
Without further ado, let’s have a brief look at the two e-commerce tech innovators to see which is the better bet from here.
Shopify
Shopify stock is up around 80% year to date. It’s been a remarkable run, but one that could have legs as the company moves on from its foray into logistics. Undoubtedly, Shopify stands to gain much by putting money into AI technologies, rather than trying to stay competitive with Amazon every step of the way.
Though Shopify may be viewed as the “anti-Amazon” to some, given its role in helping small- and medium-sized businesses (SMBs) get up and running online, I still think Shopify has more to gain as it goes down its own unique growth path. At the end of the day, it’s tough to top Amazon, a $1.5 trillion beast, in every aspect of e-commerce.
If Shopify is to see new highs again, it’ll need to innovate. In the AI age, I think Shopify has the opportunity to re-accelerate meaningfully as it looks to go after the massive digital retail scene. Sure, it’s been a hot run for SHOP stock. But I’d be willing to bet it’s not over quite yet.
Amazon
Amazon stock is up more than 66% year to date and could be ready for a melt-up toward its highs, thanks in part to the AI boom.
It’s tough to bet against Amazon, given its potential to disrupt new markets. In the age of AI, I find Amazon to be a much more disruptive company that could break into markets that may not have existed just a few years ago.
Indeed, the race to develop the best large language models (LLM) is on. As Amazon looks beyond the cloud (AWS), I think it will be tough to stop the stock in its tracks as it looks to innovate its way to greater growth again.
Better buy: AMZN or SHOP stock?
I’m a bigger fan of Amazon stock here, given it has more AI exposure. However, ideally, it’d be great to own shares of both firms at this juncture!
