3 stocks poised for growth after key inflation data

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The Federal Reserve held short-term interest rates steady, indicating that inflation is approaching its 2% target. Identifying the best stocks to buy after the July 2024 inflation data is crucial. Inflation trends and interest rates significantly impact investment decisions. As inflation stabilizes, some companies are showing resilience and growth potential. As inflation data continues to drive markets, some sectors are better positioned than others to benefit from easing inflationary pressures and possible changes in economic direction.

Retailers with a wide range of products, multiple product lines, and e-commerce capabilities will do well post-inflation. In addition, the restaurant industry—particularly fast-casual and fast-service restaurants—will benefit as customers regain purchasing power. Companies in this industry have already seen solid recoveries and growth potential.

Investing in these sectors after inflation data is released offers the opportunity to capitalize on their growth potential and market resilience, making them attractive options for long-term investment. As such, investors targeting these sectors can benefit from their recovery and proven ability to adapt and thrive in changing economic conditions.

Alibaba (BABA)

Alibaba (NYSE:WOMAN) is the world’s largest e-commerce platform. The results for Q4 FY2024 show healthy growth in the main segments. Taobao and Tmall Group (TTG) achieved double-digit GMV growth, indicating a resurgence in consumer spending and engagement on the platform. Indeed, this growth reflects a solid increase in transaction volume, a solid driver of Alibaba’s revenue from customer management services and other services. TTG has adopted a user-first strategy, which involves creating efficient systems for brands, sellers and industrial belts. Accordingly, this strategy has brought solid growth in quarterly buyers and purchase frequency.

In addition, positive consumer feedback on price competitiveness and user experience was key. 88VIP membership grew by double digits annually to exceed 35 million, reflecting improved service experience and user loyalty. Alibaba’s investment in product delivery, pricing and service quality is certainly driving consumption and purchase frequency. These measures are expected to drive further growth in TTG’s GMV. Moreover, this growth is expected to gradually return to healthy levels in fiscal 2025, and the platform’s overall shopping experience will continue to improve.

Finally, Alibaba’s GMV growth and investment in high-quality services and competitive pricing strengthen the company’s appeal as a stock to buy.

Starbucks (Chain of stores)

Starbucks (NASDAQ:SBUX) is a global coffee chain known for its strong brand equity and customer loyalty. Starbucks is expanding and renovating its store network, focusing on underserved tier 2 and tier 3 cities in North America. The new stores integrate Siren hardware to increase operational efficiency. In addition, the company is planning hundreds of new buildings and more than 800 renovations in North America for fiscal year 2024. These actions will increase revenue and improve profitability at the store level. As such, improved customer experiences and increased operational efficiency will help.

In addition, Starbucks is using digital innovations to drive customer engagement. Initiatives like the improved Starbucks app are driving engagement. Better wait time algorithms and expanded Mobile Order & Pay (MOP) capabilities are also helping. MOP revenues grew 10% year over year, with transactions up 7%, and MOP Guest Checkout expanded its customer base. It aims to increase customer frequency and spending. In addition, Starbucks Rewards membership grew to 33.8 million active members in the U.S., indicating successful efforts to retain customers and build loyalty. Digital channels are driving this growth.

These traits provide consistent growth and stable revenues, making Starbucks stock one of the best to buy despite economic fluctuations.

eBay (eBay-pl)

eBay (NASDAQ:EBAY) is a leading online marketplace facilitating peer-to-peer and business-to-consumer sales. eBay’s GMV increased 1% to $18.4 billion in Q2 2024, demonstrating eBay’s resilience despite macroeconomic challenges. GMV growth is a fundamental strength, indicating eBay’s ability to attract transactions. It also maintains a significant amount of goods being exchanged on its platform. eBay’s revenue increased 2% to $2.57 billion in Q2 2024. This growth outpaced GMV growth of 1%, indicating eBay’s effective monetization strategies and improved adoption rates. These improvements are primarily driven by first-party advertising.

In addition, translating GMV growth into revenue growth is key. It maintains profitability and enables reinvestment in the business. eBay’s own ad revenue grew 12% in Q2 2024. Total ad revenue is now approaching 2.2% of GMV. Additionally, ad revenue growth diversifies eBay’s revenue streams. It goes beyond transaction fees and increases profitability. That’s why the redesigned ad platform simplifies campaign management, attracts more advertisers, and grows revenue even more.

Overall, high GMV and ad revenue growth solidify eBay’s position as a top stock to buy.

At the time of writing, Yiannis Zourmpanos held long positions in BABA and SBUX. The opinions expressed in this article are the author’s own, subject to the InvestorPlace.com Publishing Guidelines.

At the time of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.

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