On Wednesday, JPMorgan (NYSE:JPM) highlighted Amazon (NASDAQ:AMZN) as its Best Idea, pointing to the company's continued dominance and growth within the U.S. e-commerce sector. According to JPMorgan's analysis, Amazon's share of the U.S. e-commerce market saw a year-over-year increase of 272 basis points, bringing its total market share to 46.4% in the fourth quarter. This marks the sixth consecutive quarter where the company's year-over-year market share gains have surpassed 100 basis points.
The firm projects Amazon's U.S. Gross Merchandise Volume (GMV), excluding physical stores, to grow by 12.0% year-over-year in 2024, which is slightly down from the 12.6% year-over-year growth seen in 2023. The forecast suggests that Amazon will continue to expand its share of the U.S. e-commerce market by an additional 160 basis points year-over-year.
JPMorgan expects Amazon's total retail revenue growth to remain stable at above 10%, bolstered by a combination of factors. These include the strength of third-party (3P) sales, the re-acceleration of first-party (1P) growth, the expansion of same-day and one-day (SD1D) delivery options, increased spending by Amazon Prime members, and gains in large, yet still under-penetrated verticals.
The firm's positive outlook on Amazon is also supported by the broader expectation that U.S. e-commerce penetration of adjusted retail sales could potentially double, increasing from approximately 22% in 2023 to more than 40% in the long term. This anticipated growth in e-commerce penetration underpins JPMorgan's confidence in Amazon as a leading investment idea.
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