We recently published a list of 7 Best Delivery Stocks To Invest In Now. In this article, we are going to take a look at where Amazon.com Inc. (NASDAQ:AMZN) stands against other best delivery stocks to invest in now.
The delivery and courier industry is diverse, encompassing a wide range of services that connect businesses and consumers through various shipping methods. Parcel delivery services are a major component, with companies offering both domestic and international shipping options, driven by the rise of e-commerce.
Another significant segment is food delivery platforms. These platforms connect hungry customers with local eateries, creating a new business model that thrives on convenience. Overall, the delivery industry is evolving rapidly, with diverse players working to meet the growing expectations for speed and reliability in shipping services.
According to Zion Market Research, the global on-demand delivery market was valued at $15.19 billion in 2023. Looking forward, the market is expected to grow at a compound annual growth rate (CAGR) of 20.90% during 2024-2032 to reach $83.82 billion by the end of the forecast period. In 2023, the Asia-Pacific region led the market in revenue and is projected to maintain its dominance throughout the forecast period.
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This growth is fueled by increasing consumer expectations for fast and reliable delivery services, particularly same-day and next-day options. Experts highlight that the demand for quick deliveries has led to substantial investments in last-mile delivery solutions and advanced technologies, such as automation and artificial intelligence (AI).
In 2024, consumers have continued to prioritize free and fast shipping for their online orders, according to recent data from Digital Commerce 360 and Bizrate Insights. A survey of 1,013 online shoppers revealed that 81.34% consider free shipping their top priority when receiving deliveries. Fast shipping follows closely, with 68.41% of respondents highlighting its importance. Additionally, 55.68% of consumers emphasized the need for retailers to keep products in stock and ready to ship.
AI and automation are key trends that are significantly transforming the delivery services industry, making operations more efficient and responsive to consumer demands. For example, companies like DHL Express have introduced the DHLBot in Singapore and South Korea. The DHLBot is an AI-powered robotics arm that can sort over 1,000 small parcels per hour with 99% accuracy. This technology not only speeds up the sorting process but also reduces labor costs and minimizes errors, allowing for quicker deliveries.
As the industry evolves, it is clear that AI and automation will play a crucial role in shaping the future of delivery services.
Methodology
To compile our list of the 7 best delivery stocks to invest in now, we used the Finviz and Yahoo stock screeners to find the largest delivery companies. We also reviewed our own rankings and consulted various online resources. From an initial pool of more than 20 delivery stocks, we focused on the top 7 stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s database of 912 elite hedge funds. The 7 best delivery stocks to invest in now are ranked in ascending order based on the number of hedge funds holding stakes in them as of Q2 2024.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A customer entering an internet retail store, illustrating the convenience of online shopping.
Number of Hedge Fund Holders: 308
Amazon.com Inc. (NASDAQ:AMZN) is a major American technology company known for its extensive e-commerce platform, which offers a wide variety of products ranging from books to electronics. The company has grown to become the world’s largest online retailer and a leader in cloud computing through its Amazon Web Services (AWS). A key aspect of its business is its delivery services, which include fast shipping options like Amazon Prime, allowing members to receive their orders quickly through same-day delivery, one-day delivery, and two-day delivery service options.
The company’s innovative logistics network continues to redefine online shopping and delivery experiences globally. At the end of July, Amazon.com Inc. (NASDAQ:AMZN) announced a remarkable achievement in its delivery service, reporting that over 5 billion items have already been delivered the same or next day globally this year, marking a 30% increase from the previous year. This record speed not only benefits Prime members by allowing them to receive products faster but also supports small and medium-sized businesses, with many of these deliveries made on behalf of independent sellers using the company’s Fulfillment by Amazon service. Since the launch of Prime in 2005, the selection of items eligible for free Prime shipping has expanded from just one million to over 300 million, with tens of millions available for Same-Day or One-Day Delivery. This means that Prime members now enjoy 20 times more options delivered much quicker than before, enhancing the overall value of their membership.
In November 2023, The Wall Street Journal reported that Amazon.com Inc. (NASDAQ:AMZN) surpassed UPS in parcel volume in 2022 and surpassed FedEx in 2020, with expectations that this lead will continue to grow based on internal Amazon data.
Amazon.com Inc. (NASDAQ:AMZN) is actively enhancing its services to provide even greater value to its Prime members, which makes it an attractive delivery stock to consider.
In the first half of 2024, the company achieved record delivery speeds and this rapid delivery is supported by an expanded selection of products, including popular brands like Aéropostale and Kiehl’s. Additionally, Amazon.com Inc. (NASDAQ:AMZN) now offers US Prime members a Grubhub+ membership, valued at $120 a year, and has launched grocery delivery subscriptions that allow unlimited deliveries for a low monthly fee when shopping at the company’s fresh stores in the US and the UK.
Moreover, Amazon.com Inc. (NASDAQ:AMZN) is leveraging advanced technology, including AI-powered features like the shopping assistant Rufus, to improve customer experience. The company has also expanded its pharmacy services, providing Medicare members access to essential medications for just $5 a month.
These strategic initiatives combined with the company’s focus on speed, selection, and added value position Amazon.com Inc. (NASDAQ:AMZN) as a strong contender in the delivery market. According to Insider Monkey’s database, AMZN has gained significant interest from institutional investors, with the number of hedge fund holders increasing to 308 in Q2 2024, up from 302 in the previous quarter.
Overall, AMZN ranks 1st on our list of best delivery stocks to invest in now. While we acknowledge the potential of delivery companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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