For these two e-commerce giants, dominating the Internet is a one-day affair.
The Internet has completely changed the way we live our lives, so much so that it’s easy to forget that it’s only been around for 30 years. In fact, the Internet has changed entertainment, finance, and commerce in countless ways over the past few decades.
Let’s take a look at two internet growth stocks that I think are worth considering right now.
Image source: Getty Images.
mercadolibre
First, MercadoLibre (MELI -1.69%) is a fast-growing e-commerce company focused on the Latin American market.
MercadoLibre may not be a household name in the US, but the company is an absolute giant across Latin America. Last year alone, it generated more than $7.5 billion in revenue in Brazil, $3.2 billion in Argentina, and nearly $3 billion in Mexico. Like other successful e-commerce companies, MercadoLibre has built a vertically integrated logistics network that allows it to deliver goods quickly and cheaply.
In addition to its e-commerce business, MercadoLibre also provides payment services through its Mercado Pago division. As many Latin American consumers are unbanked or underbanked, Mercado Pago fills an important niche and helps provide digital banking solutions to customers across the region.
Financially, the company’s strong revenue growth is one of its biggest assets. As of the most recent quarter (three months ending June 30, 2024), the company reported revenue of $5.1 billion, representing an impressive year-over-year revenue growth rate of 42%.
In fact, over the past three years, the company’s trailing 12-month revenue has nearly tripled, from $6.3 billion in 2021 to more than $17.4 billion.
MELI Revenue (TTM) data by YCharts.
Importantly, analysts expect MercadoLibre’s growth to continue into the future. In contrast to Europe, the United States, and Canada, Latin America has not yet fully embraced online shopping. However, it is clear from the data that the region has adopted this practice.
Meanwhile, the consensus forecast is for MercadoLibre’s sales to reach $20.1 billion this fiscal year, up 39% from last year. Analysts expect the company’s sales to be close to $25 billion in 2025, an increase of almost 24% from the previous year.
This blistering revenue growth and supporting long-term trends should give investors a good look at MercadoLibre stock.
Amazon
As the undisputed leader in e-commerce, Amazon (AMZN -1.67%) relies on a huge advantage within the industry that it continues to strengthen.
Consider Amazon’s logistics network as an example. The company began investing heavily in its supply chain at the height of the pandemic. In just two years, the company began expanding, eventually doubling the size of its fulfillment network. Additionally, Amazon has reduced delivery times by switching from a national model to a regional model centered around nine geographic hubs. This will ensure that the company’s 200 million Prime members get their packages as soon as possible.
Of course, Amazon is more than just an e-commerce company. In addition to its business, Amazon operates the world’s largest cloud services business (Amazon Web Services). In that regard, business is booming as organizations continue to move resources to the cloud. Additionally, AWS should further benefit from the rise of artificial intelligence (AI) applications, as many developers are partnering with AWS for the use of virtual machines, data centers, or other support.
Therefore, analysts expect Amazon’s sales to continue to grow, even though the company’s annual sales are already huge. Over the past 12 months, Amazon generated more than $600 billion in sales. This equates to approximately $1.6 billion per day. But looking to the future, the consensus forecast is that Amazon’s revenue will rise to $634 billion in 2025, an increase of about 11% from the previous year.
Amazon’s massive size isn’t slowing it down. In fact, the company continues to enjoy rapid sales growth by leveraging economies of scale. Investors looking to buy and hold Internet growth stocks should consider Amazon.
John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool’s board of directors. Jake Lerch has positions at Amazon and MercadoLibre. The Motley Fool has positions in and recommends Amazon and MercadoLibre. The Motley Fool has a disclosure policy.
