of S&P500 The index is up 31% over the past year, but there are some top companies with bright prospects and poised to deliver further gains. If you have an extra $1,000 to invest, investing that money in a select group of growth stocks can do wonders for your future savings goals.
Read why three Motley Fool contributors believe so. Amazon (NASDAQ:AMZN), R.H. (New York Stock Exchange: RH)and Shopify (NYSE:Shop) Your money can grow for years to come.
This winning story isn't over yet.
Jennifer Cybill (Amazon): Amazon is already generating huge shareholder wealth for those who invested early enough. The company is one of the best stocks I've ever owned on the stock market, up 82% in the past year alone.
But there's a lot more to come. Amazon is a forever stock and comes with many opportunities from different businesses.
It all started with e-commerce being king, and its share of total retail sales continues to increase. Amazon is better positioned than any other company to benefit from this organic growth engine. It already accounts for more than a third of all US e-commerce, and no other company comes close to this market share. The company continues to upgrade its systems, making improvements and separating itself significantly from its competitors. With more overnight deliveries to more customers and millions of additional products, shoppers no longer have to go anywhere to get what they need.
Amazon Web Services (AWS) has similarly taken a leadership position in cloud computing, announcing powerful generative AI tools to stay competitive. This is the recommended solution for high profile companies such as: Walt Disney and verizon communications, has a strong pipeline of new customers and expanded deals. AWS is a high-margin business, accounting for 54% of total operating income in Q4 2023.
The company is also working on developing other new businesses, including advertising, which is its fastest growing area. Total revenue increased by 14% year-on-year, and advertising increased by 27%. It's also a high-margin business that will help drive profits, and CEO Andy Jassy said it's “still in its early stages.”
Even if you've been missing out on Amazon's profits so far, you can buy today and enjoy years of growth.
Proven Winner Turning the Corner
Jeremy Bowman (right arm): It's been a rough few years for RH, the luxury home furnishings company formerly known as Restoration Hardware, in what CEO Gary Friedman called “the most challenging housing market in 30 years.” There are signs that we are finally turning a corner. ”
Recent financial struggles have also set the company up for a turnaround, with net income dropping sharply last year, and Friedman predicted RH will gain significant market share this year.
2024 is expected to be a transformational year for the company as it begins its “most compelling product transformation and platform expansion in history.”
RH has also been aggressively buying back its own shares to take advantage of the recent sell-off, which is also well-prepared for a recovery. In 2023, it will reduce its outstanding shares by 20%, and in the past two years, outstanding shares have decreased by 35%.
Unlike many of its peers, the company continues to expand its brick-and-mortar footprint, adding five new design galleries in North America and plans to add two more internationally. Anticipating a recovery, the company is also ramping up its marketing efforts, doubling the circulation of its sourcebooks and increasing advertising in design publications.
RH has significantly outperformed the S&P 500 throughout its history and appears to be entering a new growth cycle as it ramps up its marketing efforts and benefits from expected lower interest rates and a recovery in the housing market.
With an expected return to growth and a significant reduction in the number of shares outstanding, RH's profits are likely to soar over the next few years.
Shopify's growth story continues to evolve
John Ballard (Shopify): The leading online shopping and payments platform is putting together some strong earnings reports. While the stock is up 73% in the past 12 months, the company has begun to expand its offering and could enter a period of favorable growth to reward shareholders.
Shopify is more than just a platform that helps businesses set up online storefronts. We also continue to introduce new features to the Shop App, which serves as a mobile storefront for small businesses and a powerful shopping assistant for consumers. His monthly gross merchandise value in the fourth quarter of this app reached his $100 million.
Shopify's POS solution for brick-and-mortar stores is another new growth driver. The company's offline gross merchandise volume (GMV) grew 28% year over year in Q4 2023, which grew faster than Shopify's total GMV (up 23%).
Another opportunity is business-to-business (B2B) solutions. Shopify Collective is a new service that lets sellers source products from other brands and ship them directly to their customers. B2B is his $450 billion business opportunity, and management expects it to be a key driver of his 2024 growth.
With these services, Shopify is casting a wider net to not only capture a share of e-commerce spending, but increasingly the commerce market as a whole. This stock offers a lot of upside potential over the long term.
Should you invest $1,000 in Amazon right now?
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John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool's board of directors. Jennifer Cybill has a position at Walt Disney. Jeremy Bowman has held positions at Amazon, RH, Shopify, and Walt Disney. John Ballard has no position in any stocks mentioned. The Motley Fool has positions in and recommends Amazon, Shopify, and Walt Disney. The Motley Fool recommends RH and Verizon Communications. The Motley Fool has a disclosure policy.
3 Easy Stocks to Buy Now for $1,000 and Hold Forever was originally published by The Motley Fool.
