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Amazon vs. Alibaba: Which Cathie Wood E-commerce Stock is a Better Buy?

Stock MarketsMay 06, 2021 01:30PM ET
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© Reuters. Amazon vs. Alibaba: Which Cathie Wood E-commerce Stock is a Better Buy?

The e-commerce industry’s immense growth potential—with the expectation that people will stick with online shopping even after the pandemic—has made the key industry players ideal picks for renowned investor Cathie Wood’s ETFs. Amazon.com (NASDAQ:AMZN) and Alibaba Group Holding (NYSE:BABA) are two of her biggest bets in this industry. But which company is expected to deliver better returns? Continue reading to find out.Amazon.com, Inc. (AMZN) and Alibaba Group Holding Limited (BABA) are two of the world’s largest e-commerce platforms, as well as two of the most valued companies globally. AMZN and BABA together dominate online global sales volume and are two of the most profitable companies in this industry. And because the popularity of the e-commerce industry is expected to continue increasing even as COVID-19 pandemic retreats, we think the two companies still have immense upside.

The industry tailwinds and promising outlook make both stocks ideal investment bets for Cathie Wood. She holds approximately 19,800 shares of AMZN, which translates to a 0.15% weighting across ARKX and ARKF. The stock has a #117 weighted rank across both the funds. She owns some 630,989 shares of BABA, which equates to a 0.32% weighting across ARKX, ARKF and ARKQ. BABA is ranked #75 across all Ark funds.

AMZN has gained 41.1% over the past year, while BABA returned 16.3% over this period. In addition, AMZN shares have gained marginally year-to-date, while BABA’s shares declined by 2.6%. In terms of their past month’s performance, AMZN is the clear winner with 1.4% returns versus BABA’s 0.7% gains. But which of these two stocks is a better buy now? Let’s find out.

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Amazon vs. Alibaba: Which Cathie Wood E-commerce Stock is a Better Buy?
 

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Comments (1)
Andy Tolle
Andy Tolle May 07, 2021 3:43AM ET
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According to this article AMZN’s gross margin should be 40.48%, whereas in reality it's a bit less than 25% (compared to BABA's 44%). The article states that BABA would take on more debt, but their debt to equity is 0.3 whereas AMZN's is 0.8. BABA long term debt versus cash is about 0.36, but for AMZN it's 0.75.The article seems to state that the corporate bonds were issued to pay off the fine, whereas the bonds were issued in begin February and the fine was issued in Aprul. To my knowledge this whole process from start to fine took less than 1,5 months. Bottom line, I strongly wonder where they get their facts.
 
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