With hundreds of options to choose from in equity, it can sometimes be challenging to separate the wheat from the chaff.
However, some corporations appear attractive enough that in them almost seems a no-brainer. In my view, that description applies to Amazon (AMZN 1. 46%) and Shopify (SHOP -1.
72%), two e-commerce leaders. These companies have historically crushed the market over the long run, and they should continue doing so through the next decade. Here is why. Image source: Getty Images.
Amazon Amazon's e-commerce might be the first thing that comes to most people's minds. It is one of the pioneers in the field and one of the most visited websites globally.
But while this part of the company's operations generates significant revenue, its biggest sources of operating fits lie elsewhere.
Its cloud, Amazon Web Services (AWS), as well as the company's advertising platform, are doing much of the heavy lifting on that front.
As AWS and advertising capture a larger percentage of the company's sales, it will have a positive impact on its fits.
These two segments have been growing faster than the rest of the company's for years.
Earlier this year, the leader reported that its advertising ' annual run rate had more than doubled in the past four years and 2024 at $69 billion. Meanwhile, AWS remains the leader in cloud computing.
And thanks to a rapidly growing suite of artificial intelligence (AI) offerings, it is only getting better.
CEO Andy Jassy has said that the AI and cloud computing es are both in their early stages, yet they are already contributing billions to the company's sales.
That's before we explore other growth opportunities the company could capitalize on, especially its mising ventures in the healthcare sector.
Amazon has a culture of innovation, generates significant cash flow, and has more than 200 million Prime members whom it can monetize in various ways. All of these make its spects incredibly bright.
There will be headwinds, such as competition in cloud computing, with some of the company's challengers, Microsoft, slowly catching up to it.
Amazon's AWS and advertising es could also suffer if there is an economic downturn. Still, the company has performed well over the long run, despite these competitive threats.
Thanks to a wide moat stemming from switching costs and network effects, it should remain a leader in its most important.
The stock looks ly to beat Wall Street in the next decade despite its challenges. Shopify Shopify helps merchants create sophisticated online storefronts.
In today's world, that's almost a necessity, whether a company is primarily an online or not. And Shopify renders the task easier while offering a suite of valuable services.
One of its greatest strengths is its app store, which vides thousands of options that enable merchants to customize their storefronts in any way they see fit.
Another perk the company offers is the ability to market and sell ducts across major social media websites. Shopify is a leading player in its niche of the e-commerce industry.
It has captured more than 12% of the U. Market by gross merchandise volume. How might things evolve in the next decade for the company.
My view is that there is tremendous whitespace for it to exploit as retail transactions continue to switch to online channels. We haven't yet reached peak capacity in that department.
That's why analysts continue to predict that the market will grow rapidly for the foreseeable future. This expansion should create a greater demand for the types of services Shopify offers.
Furthermore, the company benefits from switching costs as well, since merchants are less ly to switch to a competing vider after time, money, and energy into building a website for their es with Shopify.
One potential risk investors should consider is that Shopify still isn't consistently fitable. That could be especially blematic in times of significant market volatility and uncertainty.
Even so, Shopify has modestly imved its margins and free cash flow over the past few years after making key changes to its. SHOP Gross fit Margin (Quarterly) data by YCharts.
The company should become fitable within the next few years. So investors should overlook the red ink and focus on Shopify's excellent spects that could lead to superior returns through 2035.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Sper Junior Bakiny has positions in Amazon and Shopify.
The Motley Fool has positions in and recommends Amazon, Microsoft, and Shopify.
The Motley Fool recommends the ing options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.