The Motley Foolยท2025-11-14 08:16Core Insights - Amazon and Shopify are both leading e-commerce stocks, with Shopify showing a remarkable 5,000% increase over the past ten years, while Amazon has increased by over 700% in the same period [1][2] Company Overview - Amazon has diversified its business model beyond e-commerce, venturing into cloud computing and online advertising, which are significant growth areas [2][4] - Shopify focuses on enabling merchants to create online stores without the need for inventory, which allows for a more streamlined business model [2][9] Growth Metrics - Amazon's overall revenue rose by 13% year-over-year, with significant contributions from Amazon Web Services (AWS) and online advertising, which grew by 20% and 24% year-over-year, respectively [5][7] - Shopify reported a 32% year-over-year revenue growth in Q3, with its merchant solutions and subscriptions growing at 14.6% and 38.2%, respectively [10][12] Profitability - Shopify enjoys a higher net profit margin of 33.8% compared to Amazon's 11.8%, attributed to its focus on digital software and lower overhead costs [12] - Amazon's diversified revenue streams, including AWS and online ads, provide some margin improvement despite its lower overall profit margins [12][15] Valuation - Amazon has a P/E ratio of 33.90, while Shopify's P/E ratio stands at 84.06, indicating a better valuation for Amazon and a greater margin of safety for investors [14] - The forward P/E ratio for Amazon is 28.57, significantly lower than Shopify's 82.64, reinforcing Amazon's more favorable valuation [14] Investment Outlook - Amazon is considered the safer investment due to its multiple revenue streams and strong positioning in the AI sector, particularly with its partnership with OpenAI [15] - Shopify, while growing faster, has limited growth opportunities if its merchant solutions revenue decelerates, making it more vulnerable to market fluctuations [15]