Dominate e-commerce and the gig economy with Amazon Flex

We recently published the list 10 Best Gig Economy Stocks to Buy. In this article we will look at where Amazon.com, Inc. (NASDAQ:AMZN) compares to other top gig economy stocks.

The rise of the gig economy

The pandemic era was heralded as one of the most profitable times for gig economy companies as more people began taking advantage of remote work opportunities through online platforms looking to connect service providers with customers. But even before that, the gig economy was a vital part of the market because at any given moment there will be a huge group of people who just want to be their own bosses – the pandemic has just made it easier for these types of people to shine brighter.

After the pandemic, as people began to realize that they could actually work from home, gig economy companies were able to maintain their profits. Even after returning to offices, many people have decided to stick to remote work options offered by well-known online platforms. According to Michael Morton, senior analyst at MoffettNathanson, the main reason for the strong performance of gig economy stocks this year is a change in investor perception of these companies. Previously, investors were less likely to choose gig economy companies because they focused too much on growth and too little on profitability. However, Morton believes that companies are now changing this approach and adopting the opposite approach – a focus on profitability is now replacing a focus on growth.

Secular tailwinds and risks for gig economy businesses

Morton believes that well-known gig economy companies operating in the passenger transportation and food delivery industries are promising businesses that will benefit from secular tailwinds. The biggest tailwind for such companies is expansion into large, untapped and reachable markets. While these new ventures will carry some risk, as large players in the gig economy begin to aggressively pursue these opportunities with high levels of investment, it can be argued that these investments will be an overall benefit to the companies that make them. tap into markets that have been previously ignored – think Southeast Asia, India, Latin America and Africa.

Another risk that some see for gig economy businesses comes from the regulatory domain. Morton believes that the services these companies provide to consumers are important enough to require a cooperative attitude from regulators around the world, as they not only offer services now considered essential, but also provide a means to generate additional income for their employees . At the same time, most of the larger gig economy players, operating in as many as 70 countries, have also demonstrated the ability to work across regulatory arenas.

These factors have done wonders in easing investor concerns about gig economy stocks, leading to more investors being convinced to buy into these companies. As a result, these stocks are only growing in popularity, so we’ve compiled a list of some of the best gig economy stocks you can buy right now.

Our methodology

We scoured ETFs and online rankings to compile a preliminary list of 20 gigabyte stocks. We then selected the 10G economy stocks with the most hedge funds owning them as of Q2 2024. The stocks are listed in ascending order by the number of hedge funds owning them.

Why are we interested in stocks that hedge funds invest in? The reason is simple: our research has shown that we can outperform the market by imitating the best stocks of the best hedge funds. As part of our quarterly newsletter strategy, we select 14 small- and large-cap stocks every quarter, and since May 2014, we have returned 275%, beating our benchmark by 150 percentage points. (see more details here).

Customer entering an online 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 large player in the e-commerce industry. It entered the gig economy with the launch of Amazon Flex, an app that lets users use their own vehicles to deliver Amazon packages to earn extra cash.

By investing in Amazon.com, Inc. (NASDAQ:AMZN), investors can’t just benefit from the profitability of a classic gig economy player, because there’s a lot more going on at the company. Its e-commerce business is among the largest in the world and is the company’s main revenue driver. In the second quarter, the company’s revenue grew 10% year-over-year to $148 billion, led by e-commerce sales.

The e-commerce business is the heart of Amazon.com, Inc. (NASDAQ:AMZN). Through this segment, the company not only benefits itself but also increases the level of sellers selling on its platform, which in turn ultimately increases Amazon.com, Inc.’s profits. (NASDAQ:AMZN). In the second quarter, the operating margin of the e-commerce segment also increased by 58% year-over-year, for example, to $5.1 billion. Most of the profits come from online sales, but a huge portion also comes from fees charged to sellers on the Amazon platform.

Amazon.com, Inc. (NASDAQ:AMZN) is also well 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 in the gig economy it might be able to offer additional profit generated in other lucrative business segments.

Holding shares worth a total of $65.8 billion, 308 hedge funds were long Amazon.com, Inc. during the second quarter. (NASDAQ:AMZN).

Overall, AMZN takes 1st place on our list of the 10 best gig economy stocks to buy. While AMZN is an exceptional investment, we believe AI stock promises to deliver high returns and in a shorter period of time. If you’re looking for an AI stock that shows more promise than AMZN and is trading at less than 5 times earnings, check out our report on cheapest AI stocks.

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Disclosure: None. This article was originally published on Insider Monkey.