The e-commerce market hasn't been the most reliable place to invest in recent years. The pandemic sent stocks skyrocketing as homebound consumers took to buying essentials online. Then, an economic downturn in 2022 stole what many companies had gained, as reductions in consumer spending caused a sell-off.
However, easing inflation has boosted the industry again and has many retail companies back on a growth path. Recent challenges have proved the strength and resilience of many businesses, making them attractive long-term investments. With the market recovering, now is an excellent time to add an e-commerce company to your portfolio and profit from its projected growth.
In fact, the e-commerce market is expected to hit $3.6 trillion this year and continue expanding to achieve a value of $5.6 trillion by 2027.So, here are three top e-commerce stocks to buy in September.
1. Amazon
Amazon (AMZN 0.75%) has grown into a retail behemoth since its founding in 1994. The company holds leading market shares in numerous countries around the globe, with a 38% share of e-commerce in the U.S. Its dominance is most evident by the fact Walmart is responsible for the second-largest market share at only 6%.
The company's command of the market came at a price last year. It reported operating losses of $10.6 billion from its e-commerce segments in fiscal 2022 as it battled macroeconomic headwinds. However, Amazon's retail business has enjoyed a correction in 2023. The company's North American segment returned to profitability in the first quarter, then hit over $3 billion in operating income in the second quarter after reporting losses of $627 million in the year-ago quarter.
The solid recovery has come thanks to decisive restructuring moves such as closing dozens of warehouses, shuttering unprofitable services like Amazon Care, and thousands of layoffs. The company's performance this year illustrates the resilience of its business and its ability to weather any storm, making Amazon's stock a screaming buy this month.
2. Apple
Apple (AAPL 2.48%) might not be the first company to come to mind when discussing e-commerce. But its 4% market share in the sector makes it the third-largest e-commerce company in the U.S. It has a vastly smaller catalog of products than companies like Amazon and Walmart, but its position in online retail illustrates how potent its offerings have become.
The iPhone company has leading market shares in smartphones, tablets, smartwatches, and headphones. Its success across these sectors has seen its annual revenue climb 48% over the last five years, with operating income rising 68%.
And Apple is gradually expanding its product lineup. The company unveiled its first virtual/augmented reality (VR/AR) headset in June. If the company's past performance when entering new markets is anything to go by, an investment in Apple could be an investment in the future leader of this $31 billion market.
It has stumbled this year as economic challenges have caught up with its product revenue. As a result, Apple stock is down 4% since the start of August. However, the company's long-term growth history, alongside expansions into markets like VR/AR and artificial intelligence (AI), make it worth buying the dip in Apple stock this September.
3. PayPal
As with many e-commerce companies, PayPal Holdings (PYPL 1.56%) suffered significant declines last year. Its stock plunged 62% throughout 2022 as online retail purchases tanked. But the company remains one of the biggest names in online payment processing, holding a 40% market share as of July. As a result, it could see a massive benefit from easing inflation and long-term e-commerce growth.
According to Statista, online retail sales made up about 19% of all global purchases in 2022. That figure has increased from about 7% in 2015. In the same period, PayPal's annual revenue has risen 242%, with operating income up 218%.
Moreover, PayPal has expanded its in-store services, with its technology now in thousands of physical point-of-sale locations across 20 different merchants. Improvements in its business have paid off, with revenue rising 7% in the second quarter and beating analysts' expectations by $30 million.
Meanwhile, PayPal's price-to-earnings ratio of 18 indicates it is one of the best-value stocks available right now. Wall Street is underestimating the payment company, making September the perfect time to invest.
