Stock picking is a delicate balance of art and science, and for investors seeking the scientific edge, TipRanks provides a valuable tool in the form of its AI-driven data sorting mechanism, the Smart Score. This sophisticated tool, driven by natural language algorithms, aggregates vast amounts of market data, providing investors with a concise score on a scale from 1 to 10, offering a snapshot of a stock’s potential trajectory. Topping this list are the ‘Perfect 10’ stocks, representing those shares deserving of meticulous examination.
Amazon – A Retail Titan’s Ascendancy
Leading the charge on the ‘Perfect 10’ list is Amazon, a behemoth in the retail landscape that has transcended its humble origins as an online bookstore to emerge as the globe’s premier e-commerce entity. With a staggering market capitalization of $1.8 trillion and daily sales approximating $1.4 billion, Amazon’s footprint in the retail realm is unparalleled.
Amazon’s prowess extends beyond its online eminence, with a vast physical infrastructure bolstering its swift delivery guarantees. Boasting a global network of colossal warehouses and fulfillment centers, some spanning over 1 million square feet, the company orchestrates worldwide deliveries, often providing next-day service in numerous regions. At the heart of its operations lies a website that ranks among the most visited on the internet, with over 2 billion monthly site visits.
While e-commerce forms Amazon’s core, the corporation diversifies its offerings to cater to evolving consumer demands. Branching into a gamut of services, including the popular AWS cloud computing platform and a spectrum of entertainment and household services, Amazon leverages subscription models to permeate daily life, ensuring its relevance in a dynamic market.
In its recent quarter, 4Q23, Amazon reported a staggering $170 billion in revenue, marking a nearly 14% surge from the prior-year period and surpassing expectations by $3.74 billion. With a $1 EPS derived from a net income of $10.6 billion and AWS contributing significantly to revenue, Amazon’s growth trajectory remains robust.
Deutsche Bank’s Lee Horowitz underscores Amazon’s income generation prowess, projecting sustained growth. With a Buy rating and a price target of $210, indicating a potential 20% upside, analysts unanimously favor Amazon, with 41 positive reviews signaling a Strong Buy consensus. Priced at $175.35, AMZN is poised for growth, with an average target price of $208.48, suggesting a near 19% increase over the next year.
Alibaba Holdings – China’s E-Commerce Magnate
On the heels of Amazon’s dominance, Alibaba emerges as a titan in the e-commerce sphere, often touted as ‘China’s Amazon.’ Founded by the illustrious Jack Ma in 1999, Alibaba reigns supreme in China’s e-commerce realm, catering to a market of 1.4 billion individuals. While expanding globally, Alibaba’s core operations remain entrenched in Chinese soil.
Boasting swift delivery guarantees and an expansive product catalog, Alibaba serves as a fulcrum for China’s e-commerce ecosystem, facilitating seamless transactions across its homeland and beyond. With a colossal array of 200 million-plus products spanning 5,900 categories and relationships with over 200,000 suppliers, Alibaba offers extensive reach across 200 countries and territories.
While Alibaba mirrors Amazon in diversification, its retail arm commands the lion’s share of revenue, with 67% stemming from Chinese retail and 5% from international commerce in fiscal year 2022. Despite a 5% share price dip this year, Alibaba remained resilient, underscoring its robust financials.
The latest quarter results showed Alibaba amassing $36.67 billion in revenue, a 5% uptick year-over-year and surpassing estimates by $270 million. With $2.67 earnings per share and $7.96 billion in free cash flow in the quarter, Alibaba presented a strong financial picture. Notwithstanding recent share price turbulence, Truist’s standout analyst Youssef Squali maintains a bullish stance on BABA, citing Alibaba’s favorable positioning and potential growth prospects.