Inflation fears have put a dent in the technology sector’s gains for most of 2022, but a tech rebound could put these stocks back in favor again. For one tech giant, Amazon, this could bode well for e-commerce stocks or for general exposure, e-commerce exchange traded funds (ETFs).
Amazon could be one of those stocks to rebound after a dismal first three quarters for the online retail giant. At the current price levels, it certainly offers an attractive value option for investors looking to get into Amazon at a discount.
“We believe Amazon’s current stock price already embeds headwinds from a recession/cost inflation and expect the market to attribute greater value to core-retail over time as cost headwinds are addressed and profitability expands,” said Jefferies long-time tech analyst Brent Thill.
Another way to play the rebound is via e-commerce stocks or a broader play that captures the sector via the Global X Funds – Global X E-commerce ETF (EBIZ). EBIZ seeks to invest in companies positioned to benefit from the increased adoption of e-commerce as a distribution model, including companies whose principal business is in operating e-commerce platforms, providing e-commerce software and services, and/or selling goods and services online. Amazon is one of the holdings of EBIZ.
EBIZ offers investors:
- High Growth Potential: Despite years of strong growth, e-commerce still represented less than one-fifth of global retail sales in 2020, highlighting substantial room for further adoption.
- Global Tailwinds: E-commerce is a global theme, poised to benefit as expanding broadband and mobile internet penetration coincide with a rising middle class in developing markets.
- New Consumer Preferences: The pandemic forced many businesses to offer goods and services online for the first time, which has shifted consumer expectations and expanded the scope of e-commerce to larger segments like groceries and autos.
A Diversified Option in E-commerce
For another grow-oriented play that could offer investors a level of diversification by investing in emerging markets (EM), the Global X Emerging Markets Internet & E-Commerce ETF (EWEB) offers another attractive option. The fund seeks to invest in companies positioned to benefit from the increased adoption of internet and e-commerce technologies in emerging markets.
EWEB offers investors:
- High Growth Potential: By 2025, a forecasted 70% of the global population will have a mobile internet subscription, with new subscribers mostly coming from emerging markets.
- New Consumer Preferences: The pandemic forced many businesses to offer goods and services online for the first time, which has shifted consumer expectations and expanded the domain of internet and e-commerce companies.
- Structural Tailwinds: Innovative internet and e-commerce companies are sprouting up across the world. EWEB looks beyond Silicon Valley and other household names, targeting those positioned to capitalize on untapped growth in emerging markets.
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