Amazon Remains ‘Best Idea,’ Analyst Says: Expect US E-Commerce Penetration To Double Over 40%

Amazon (NASDAQ:AMZN) is the “Best Idea” for long-term investment and poised to lead the evolving e-commerce arena, according to JPMorgan analyst Doug Anmuth.

What Happened: Anmuth predicts a potential doubling of U.S. e-commerce penetration to over 40%.

The recently released fourth-quarter (Q4) U.S. e-commerce spending data showcases a commendable +7.2% YoY growth. This underlines the stability of online growth trends.

The analysis highlights the significant upward trajectory of U.S. e-commerce penetration, reaching 23.3% of Adjusted Retail Sales in 4Q — an +84bps year-over-year increase for the sixth consecutive quarter.

According to Anmuth, Amazon demonstrated its prowess with a share of 46.4% in Q4. The company achieved year-over-year share gains exceeding 100bps for the sixth consecutive quarter. Record-breaking events solidify Amazon’s position as an industry leader.

Anmuth anticipates an acceleration in e-commerce growth for Amazon in 2024, projecting a +8.1% year-over-year growth. Hence, in 2023, Amazon outperformed the industry’s +7.6% year-over-year growth.

Fueled by growth in under-penetrated categories, Amazon now aims to increase its share of Adjusted Retail Sales to 22.9% in 2024 — an +112bps year-over-year rise.

The ‘Best Idea’

Anmuth also emphasized Amazon as the ‘Best Idea’ for long-term investment. He highlighted the company’s resilience, strategic focus, and innovative endeavors in this regard.

Beyond traditional e-commerce, he underscored Amazon’s foray into connected TV, aligning with broader streaming trends for sustained growth and future revenue streams, as catalysts for growth.

JPMorgan sees a future brimming with opportunities in U.S. e-commerce, with Amazon leading the charge.

As e-commerce penetration gears up for a potential double to more than 40%+, Amazon’s strategic positioning and robust performance make it the quintessential ‘Best Idea’ for investors eyeing long-term success.

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