Amazon (NASDAQ:AMZN) remains the undisputed king of e-commerce. Alphabet’s (NASDAQ:GOOG,NASDAQ:GOOGL) continues to dominate the search advertising market. With this, you may think it’s a challenge to figure out which are the stocks that could be the next Amazon or Google.
When it comes to the relatively smaller U.S.-based tech companies, few appear possible Amazon or Google “killers.”
Some, like Palantir Technologies (NASDAQ:PLTR), could become top dogs in sectors like AI enterprise software, but it’s hard to see a new U.S. e-commerce or search advertising powerhouse emerging.
However, taking a look at major international tech names, there are a few stocks that could be the next Amazon or Google. Let’s take a look at each one, and see why.
Alibaba Group (BABA)
Alibaba Group (NYSE:BABA) has been China’s answer to Amazon, but investor confidence in BABA has admittedly waned considerably in recent years.
China’s tech crackdown, plus the country’s “Zero COVID” policies during 2022 and 2023, have both severely affected Alibaba’s fiscal performance, as well as the performance of BABA shares.
However, after sliding from over $300 to the low-$70s per share since 2020, now may be the time to make a long-term wager on BABA stock. Yes, the stock’s valuation (8.5 times forward earnings) makes sense given forecasts calling for little in the way of earnings growth next fiscal year (ending March 2025).
Still, if Chinese economic challenges ease, Alibaba could experience a growth recovery. In turn, spurring a market rerating. As InvestorPlace’s Alex Siriois argued earlier this month, the company’s big move into generative AI is a massive potential growth catalyst for BABA.
Baidu (BIDU)
Similar to Alibaba being considered “China’s Amazon,” Baidu (NASDAQ:BIDU) has been called “China’s Google,” going as far back as the search engine and streaming company’s IPO nearly twenty years ago.
Many may argue that the opportunity for BIDU stock to become one of the stocks that could be the next Amazon or Google has come and gone.
After all, despite the “China’s Google” moniker, Baidu (with a $36.4 billion) is significantly smaller than Alphabet (with a $1.85 trillion market cap). Baidu’s growth has also stalled in recent years. Baidu’s growth prospects may already be improving.
At least, based upon the initial success with its generative AI endeavors. Ernie Bot, a chatbot similar to that of OpenAI’s ChatGPT, has already started to become a revenue generator.
Subsequent news could lead to ‘AI mania’ for BIDU, which right now trades at a supercheap 9.2 times forward earnings.
JD.com (JD)
JD.com (NASDAQ:JD) is another China-based “Amazon killer” contender. Both country specific tail winds mentioned has affected shares in this Chinese e-commerce giant above, as well as concerns that JD.com is falling behind its domestic peers.
However, the company is pursuing a path to growth, hinging largely on international expansion.
There is great uncertainty regarding JD.com’s global growth gambit, yet this may be more than accounted for, in the valuation of JD stock. Shares trade for only 8.5 times earnings. This comes despite JD.com starting to turn things around.
Global growth is a work-in-progress, but a newfound focus on sales promotions may have played a role in JD’s revenue beat for Q4 2023. Analysts are now anticipating double-digit earnings growth during 2025 and 2026. Bouncing back since the start of March, the JD recovery could carry on in the months ahead.
MercadoLibre (MELI)
After looking at three Chinese stocks that could be the next Amazon or Google, let’s take a look at MercadoLibre (NASDAQ:MELI), considered to be “Latin America’s Amazon.”
Actually, MercadoLibre is not only an e-commerce powerhouse.
As I discussed previously, it’s also a fintech powerhouse as well. MercadoLibre’s fintech units blend well with the company’s e-commerce operations, and provide another growth catalyst for MELI stock. Investors have long been aware of MELI’s long-term potential, resulting in shares sporting a rich valuation.
However, as a Barron’s commentator recently argued, MercadoLibre’s post-earnings sell-off has created a solid entry point for a position.
With e-commerce market penetration still fairly low in Latin America (10%), and with the company perhaps having a deeper competitive moat in its home markets than Amazon does in the U.S., even after surging by nearly 1500% over the past decade, MELI shares may have more room to run.
PDD Holdings (PDD)
PDD Holdings (NASDAQ:PDD) was formerly known as Pinduoduo, which is also the name of PDD’s flagship China-based e-commerce platform.
However, a more important aspect to the PDD growth story, especially in terms of it becoming a formidable competitor to Amazon, is the success thus far with PDD’s Temu e-commerce site.
While Pinduoduo’s resilience in a sluggish Chinese economy played a role, Temu’s success overseas, particularly in the U.S., was a major factor in PDD’s earnings beat for the preceding quarter. Yes, alongside achieving success stateside, Temu has also been the subject of controversy.
Yet even as PDD looks to reduce Temu’s reliance on the U.S. market (due to growing geopolitical tensions), pivoting toward markets in Europe, the Middle East, and Asia could prove just as successful. With analysts expecting continued high growth, shares are a bargain, at 16.7 times forward earnings.
Sea Ltd. (SE)
You likely knew about most of the stocks that could be the next Amazon or Google listed above, but you may be less familiar with Singapore-based Sea Ltd. (NYSE:SE). Sea can is a tech holding company.
Sea’s interests include online gaming (via its Garena platform), e-commerce (through its Shopee unit), as well as fintech (through its SeaMoney unit).
SE stock tumbled during the 2022 tech sell-off. However, shares may be embarking on a comeback. Over the past month, SE has surged.
Largely, because of a well-received earnings release, which included news of Sea achieving its first full year of profitability. Sea’s growth is also picking back up. This could lead to significant earnings growth, per analyst earnings forecasts. Even at a somewhat pricey 31 times forward earnings, SE is another possible AMZN or GOOG in the making that you should consider buying.
Tencent Holdings (TCEHY)
Tencent Holdings (OTCMKTS:TCEHY) is another long-standing China-based competitor to America’s Big Tech giants.
This stock offers exposure to most major segments of China’s tech sector, including social media, video streaming, fintech, telehealth, and more recently, to the fast-growing gen AI space.
Last year, Tencent debuted its Hunyuan large language AI model. In the near-term, China’s economic challenges could continue to affect this company’s fiscal performance, as was the case last quarter.
However, as InvestorPlace’s Thomas Yeung pointed out last month, Tencent remains on good terms with the Chinese government. This bodes well for its AI prospects, as China pursues “AI nationalism.”
That’s not all. Irrespective of governmental policy, Tencent’s integration of AI will probably enhance the operating performance of its various digital-based businesses. Although trading at a premium to peers like BABA, at 13.1 times forward earnings, TCEHY stock appears more than reasonably priced considering the bullish factors.
On the date of publication, Thomas Niel did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.