John Ballard, Jeremy Bowman, and Jennifer Saibil, The Motley Fool
7 min read
In This Article:
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Amazon's forward-thinking culture will continue to win for shareholders.
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MercadoLibre is reporting high growth, but 85% of retail sales in its market are still offline, offering a long growth runway.
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Shopify continues to innovate and deliver superior growth.
Investing in the right growth stocks can help you build wealth for retirement. Companies that are seeing above-average growth in their businesses are usually in a competitively strong position that leads to years of compounding returns for shareholders.
If you have $5,000, or even less, that you can afford to commit to a long-term investment strategy, there are attractive opportunities to put that money to work. To give you some ideas, read why three Fool.com contributors believe Amazon (NASDAQ: AMZN), MercadoLibre (NASDAQ: MELI), and Shopify (NASDAQ: SHOP) are well positioned to deliver solid returns for decades to come.
John Ballard (Amazon): Amazon has delivered incredible returns for investors, and the recent pullback is a great opportunity to buy shares at a more attractive valuation. Amazon has multiple ways to drive growth to fuel shareholder returns.
Amazon is known for its online store, where it held 37% share of the U.S. e-commerce market in 2023, according to Statista. What's attractive about Amazon's competitive position is that it generates a lot of online sales from repeat purchases from over 200 million Prime members, who pay subscription fees to get free shipping and other benefits. This provides high visibility for future sales, which typically gets rewarded by a higher valuation by investors.
Another reason Amazon is a stock you can confidently hold forever is that it's a forward-thinking company. Founder Jeff Bezos infused the company with an experimental culture that is willing to take risks. Large companies often fall into the trap of playing defense and don't take enough risks to keep innovating. Businesses that don't continue to take risks leave the door open for disruptive new entrants to offer something better to consumers.
Amazon will continue to win because of its investments in artificial intelligence (AI). Amazon Web Services (AWS) generated $112 billion in revenue over the last year, making it the leading cloud services provider. Companies are spending billions with AWS to use AI with their data, and of course, Amazon is benefiting from the same technology.
Amazon has a huge opportunity to lower costs in its online retail business using robotics, which could lead to massive growth in earnings and cash flow. AI is enabling Amazon's customers to order products using their voice with Alexa. There are over 600 million Alexa devices in customers' homes, which strengthens Amazon's competitive advantage.
