We recently published a list 10 Best Gig Economy Stocks to Buy. In this article, we are going to take a look at where Amazon.com, Inc. (NASDAQ: AMZN ) stands against other best performing economy stocks.
The Rise of the Gig Economy
The pandemic era has been heralded as one of the most profitable periods for gig economy stocks, as more and more people begin to pick up remote work opportunities through online platforms to connect service providers and clients. But even before that, the gig economy has become an important part of the market since, at any time, there will be a massive cohort of people who simply want to be their own boss – the pandemic only facilitates this type. people to shine bright.
Post-pandemic, when people start to realize that they can, in fact, work from home, gig economy companies can retain their profits. Even after returning to the office, many people decide to stay with remote work opportunities provided by well-known online platforms. According to Michael Morton, Senior analyst at MoffettNathanson, the main reason why gig economy stocks have performed well in the market this year is that the perception of investors about this business is changing. Previously, investors were less inclined to gig economy companies because they used to focus too much on growth and not enough on profitability. However, Morton believes that companies that change this approach to do the opposite now – focus on profitability is now overruling that on growth.
Secular Tailwinds and Risks for Gig Economy Businesses
Morton believes the well-known gig economy business in the transportation and food delivery space is a promising business set to benefit from secular tailwinds. The biggest tailwind for such businesses is their expansion into large, untapped, addressable markets. Although there is a level of risk attached to these new businesses when large gig economy players begin to aggressively pursue these opportunities with high levels of investment, there is room to argue that these investments will be in the general interest of the businesses that do. tap into markets that have been neglected – think Southeast Asia, India, Latin America, and Africa.
Another risk that some people see for gig economy businesses is in the regulatory domain. Morton believes that the services provided by these companies to customers are important enough to require a cooperative attitude from regulatory bodies around the world, because they not only offer what is now considered an essential service but also provide a way to generate additional income for their employees. . At the same time, most of your gig economy players with operations in up to 70 countries have also demonstrated the ability to work with various regulatory landscapes.
These factors have worked wonders in terms of eliminating investors’ concerns about gig economy stocks, a development that has led to more confident investors buying into these businesses. As a result, the popularity of these stocks is only increasing, which is why we’ve compiled a list of some of the best gig economy stocks to buy right now.
Our methodology
We sifted through ETFs and online rankings to compile an initial list of 20 gig economy stocks. We then select 10 gig economy stocks with the highest number of hedge funds holding stakes in them, as of Q2 2024. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them.
Why do we focus on stocks that hedge funds pile into? The reason is simple: our research shows that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter strategy picks 14 small-cap and large-cap stocks each quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
A customer enters an internet retail store, illustrating the convenience of online shopping.
Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 308
Amazon.com, Inc. (NASDAQ: AMZN ) is a big tech e-commerce player. It entered the gig economy with the launch of Amazon Flex, an app that allows users to use their own vehicles to deliver Amazon packages to earn extra cash.
By investing in Amazon.com, Inc. (NASDAQ: AMZN), investors not only benefit from the profitability of our classic gig economy players since this company has more going on. Its e-commerce business is the largest in the world and is the main driver of the company’s revenue. In the second quarter, the company’s revenue rose 10% year-on-year to $148 billion, and the biggest contributor to this was e-commerce sales.
The e-commerce business is the heart of Amazon.com, Inc. (NASDAQ: AMZN) as a company. Through this segment, the company not only benefits itself, but also uplifts merchants selling on its platform – which in turn drives up profits for Amazon.com, Inc. (NASDAQ: AMZN) in the end. The second quarter also saw e-commerce operating margin jump by 58% year-over-year to $5.1 billion, for example. Most of the profits here come from online sales, but a large chunk also comes from fees charged to sellers on the Amazon platform.
Amazon.com, Inc. (NASDAQ: AMZN) is also known for its cloud computing business, Amazon Web Services, which only makes it an even more lucrative player in the market for those looking to buy shares of the gig economy. offers some additional benefits generated from other lucrative business segments.
Holding a total stake of $65.8 billion in the stock, 308 hedge funds were long Amazon.com, Inc (NASDAQ: AMZN ) in the second quarter.
Overall, AMZN rank 1 on our list of the 10 Best Gig Economy Stocks to Buy. Although AMZN is an outstanding investment, we believe that AI stock holds the promise of delivering high returns and doing so in a shorter time frame. If you’re looking for AI stocks that are more promising than AMZN and are trading at less than 5 times earnings, check out our report on the cheapest AI stock.
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Disclosure: None. This article was originally published on Insider Monkey.
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