It's no secret that tech stocks have been volatile over the past year, with the tech-heavy Nasdaq Composite essentially flat over the past year. And while the roller-coaster ride has been understandably unnerving for investors, there are still some great tech segments that investors should consider.
One of them is e-commerce, which is poised to become a $7 trillion market by 2025, according to eMarketer. Three companies already thriving in this space right now are Shopify (SHOP -2.37%), MercadoLibre (MELI -1.79%), and Amazon (AMZN -1.64%). Here's why investors should consider scooping up shares of these e-commerce leaders.
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1. Shopify
Shopify provides a platform for businesses of all sizes to sell their goods and services online, and its share price has surged 70% over the past year as the company has delivered impressive results.
Shopify's revenue and earnings outpaced Wall Street's consensus estimate in the most recent quarter, with sales rising 25% to $1.5 billion -- ahead of analysts' consensus estimates of $1.43 billion -- and earnings of $0.01 per share easily outpacing Wall Street's estimate of a loss of $0.04.
That growth is amid an increasingly tough economic time, and Shopify hasn't been immune to some major adjustments. The company is selling its logistics business in order to focus more attention on e-commerce, a move that will eliminate 20% of its workforce.
But despite that pivot, the company's long-term opportunities appear to be intact. Total gross merchandise volume in the most recent quarter, the amount spent through its platform, was up 15% to $49.6 billion. Additionally, the company continues to add high-value merchants, with Shopify Plus merchants accounting for 34% of monthly recurring revenue, up from 30% in the year-ago quarter.
With Shopify already a leading player in e-commerce and continuing to grow at a healthy clip, investors should consider opening up a position in this stock right now.
2. MercadoLibre
MercadoLibre is the leading digital retailer in Latin America, and the company's latest quarter shows just why the company is a great e-commerce play. Sales popped 58% in the first quarter to $3 billion (adjusted for currency exchange rates).
Even more impressive was MercadoLibre's earnings per share of $4.01 for the quarter -- a massive 200% increase year over year. The company's management said the strong performance was thanks to commerce revenue that surged 54% and fintech sales that rose 64%.
Adding to all the company's growth was the fact that MercadoLibre topped 100 million unique active users in the quarter, as users surged 25% from the year-ago quarter.
MercadoLibre has proved that it can successfully tap the Latin American e-commerce market, and with digital buyers already topping 300 million in the region -- and poised to grow by more than 20% by 2027 -- the company still has lots of long-term potential in this market.
3. Amazon
Amazon has built out an amazing e-commerce business that now boasts more than 200 million global Prime members, and the company took nearly 40% of the U.S. e-commerce market last year. And there's no reason to think the company will give up that dominance anytime soon.
Amazon has invested heavily in its logistics business over the years, creating a goods delivery system that is unmatched. Reliable two-day, one-day, and even hourly delivery has become a staple for Amazon and has created a loyal customer base.
The company's North American e-commerce sales rose just 11% in the most recent quarter to $76.9 billion, but that modest growth has more to do with the temporary macroeconomic environment than a problem with Amazon's business.
Consider that e-commerce sales make up just 14.6% of all retail sales in the U.S. right now, which gives the company more room to expand as this market grows in the coming years.
And with the company having a price-to-sales ratio of just 2 right now -- the lowest it's been in nearly eight years -- now is a good time to pick up the stock while it's trading at a relative discount.
