Best stocks to buy now: Amazon vs. Disney

Over the past few weeks, many companies have provided positive updates to investors. Inflation appears to be easing and strategic efforts to combat inflation are bearing fruit. Two typical examples are: Amazon (AMZN 0.86%) and Walt Disney (DIS -0.34%)recently surprised investors with its strong performance.

Both stocks are up this year, with Amazon up 15% and Disney’s stock up 20% since early 2024 after a popular update. These two stocks are doing great. But which one is better to buy today?

For Amazon: Much better than the competition

Amazon’s case is very simple. It has no competition. His two main businesses, e-commerce and Amazon Web Services (AWS), far outperform any of his competitors. According to Statista, Amazon has 37.6% of the U.S. e-commerce market, and its closest competitors are walmart, only 6.4%. AWS has 31% of the cloud computing market, and its closest competitors are microsoftof Azure was 24%.

While current performance doesn’t necessarily mean the status quo, Amazon is investing in both businesses to maintain its lead and ensure strong future growth.

The company’s new regional network means goods have to travel fewer distances, allowing them to reach customers faster and at lower prices. The company also expanded its same-day delivery facilities, and in the fourth quarter of 2023, the number of next-day delivery items increased by 65% ​​compared to the same period last year. Amazon’s logistics network is unbeatable, so there is little room to compete with Amazon in terms of speed. As a result, customers are more likely to continue turning to Amazon for things like essentials.

Amazon has launched a variety of generative artificial intelligence (AI) services on AWS to help customers work faster and deliver better results. This is to book long-term contract deals with clients such as: Nvidia and sales forceAnd this high-margin business should deliver high value to Amazon overall for many years.

Other businesses are expanding as well. Advertising is currently the company’s fastest growing segment, with fourth-quarter revenue up 26% year-over-year, and its streaming and healthcare businesses are also making progress.

Trends are working in Amazon’s favor in the short term, and in the long term, it is closing in on its outer moat to maintain its dominant position. This is a classic case of winners keep winning.

At Disney: All the parts work together

Disney’s business may not be as broad as Amazon’s, but it is also a collection of functional parts of a robust entertainment machine. After several years of pressure on many fronts, everything seems to be starting to work together.

In the first quarter of fiscal 2024 (ending December 31, 2023), park revenue increased 7% year-over-year and streaming revenue increased 15%. Revenues were hampered by declines in the linear networks that make up Disney’s broadcast and cable channels. But the big story is that his streaming losses have improved, shrinking his losses from nearly $1 billion to his $138 million. This inspires confidence that Disney can meet its promise to turn its streaming business profitable by the end of the fiscal year.

If parks and streaming perform well, Disney can return to serious growth. CEO Bob Iger has also committed to bringing content production under control after several missteps last year, and worries that the company is producing too quickly, leading to a decline in quality. Disney in particular has cut back on Marvel Studios production, with six of the top 10 streaming movies of 2023 coming from Disney.

Another thorn in Disney’s side is ESPN. The company has so far not made a strong effort to turn its streaming network, ESPN+, into a fully loaded channel. That’s because much of that content is already on the company’s cable network.However, it announced a deal with Fox and warner bros discovery Last week we created a joint sports channel. We’re also launching another ESPN network with a suite of digital services to enhance your overall sports experience.

Disney is well-positioned to soar this year and continue to profit in the future.

What are the best stocks to buy now?

Both of these companies operate large businesses with many moving parts and are at the top of their respective industries. Both are reporting strong performance.

Investors were even more impressed with Disney’s report as it showed incredible progress. The same goes for Amazon, which doesn’t make it any less impressive, but its revenue didn’t rise in the same way.

Both Amazon and Disney stocks are likely to perform well this year and in the future. But I see Amazon as having an advantage. The company has a broader range of businesses and is more reliable for growth and profits. However, one or both of these may be included in your portfolio.