2 Brilliant Growth Stocks to Buy Now and Hold for the Long Term

Amazon (NASDAQ: AMZN) and Shopify (NASDAQ: SHOP) have been excellent stocks to own over the past decade as both have crushed broader equities. Neither company looks likely to stop anytime soon, though. Both e-commerce leaders have outstanding qualities that could make them top long-term holdings. Here is more on these market darlings.

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1. Amazon

Amazon's business spans multiple industries: E-commerce, cloud computing, advertising, video and music streaming, grocery shopping, and healthcare. What's more impressive than the breadth of the company's operations is the fact that it is a leader -- or at least, one of the leaders -- in many of the niches where it operates. It has a runaway lead in the U.S. e-commerce space, for instance, while also holding the top spot in the global cloud market.

That already tells us a lot about the strength of Amazon's business. It also highlights that the company has multiple avenues for growth. Consider Amazon's core e-commerce operations. Online transactions still represent less than 20% of total retail activity in the U.S., so there is a vast runway for growth here, one that Amazon should successfully ride for a long time given its lead and wide moat thanks to the network effect.

And although Amazon's e-commerce business is a low-margin operation, the company is slowly working to address that. The tech leader's increased reliance on industrial robots could help it cut costs and improve efficiency, potentially boosting e-commerce margins.

Amazon's advertising business also looks promising, as it has been one of its fastest-growing segments for years. Of course, the company's most exciting unit is arguably its cloud division, Amazon Web Services. What CEO Andy Jassy said a few years ago still rings true: Cloud computing and generative artificial intelligence (AI) represent massive growth opportunities. Amazon is making significant infrastructure investments that could allow it to cash in on these fast-growing markets for years to come.

Beyond that, the company is slowly making progress with its healthcare ventures. It has successfully disrupted the pharmacy landscape in the U.S., for instance, thanks to the same highly convenient and fast, same-day delivery model it used to dominate the e-commerce landscape and take market share away from legacy brick-and-mortar retail stores. Amazon is well-positioned to deliver outstanding returns as it makes headway in its core markets while profiting from new opportunities, such as healthcare. Although the stock has lagged broader equities over the past 12 months, long-term investors should stay put.

2. Shopify

Shopify is another e-commerce leader, although with a slightly different focus. The company helps businesses build online storefronts. Shopify's easy-to-use platform makes the task simple enough that those who don't know anything about coding can do it themselves. The company offers its clients plenty of flexibility and customization options, thanks in part to an app store with thousands of apps that cater to the many needs of business owners. Shopify offers much more than just online store-building services, though.

It also handles payments, marketing and analytics, advertising, inventory management, selling across major social media platforms, and much more. Shopify has been hugely successful. The company powers about 29% of U.S. e-commerce websites.

The company has also made progress on the bottom line, having been unprofitable for a long time. But the company has been posting net profits in recent years.

SHOP Net Income (TTM) data by YCharts

Business is booming for Shopify, and there is more where that came from. The company should also capitalize on the ongoing shift to e-commerce. And although competition is fierce and will likely intensify, Shopify benefits from a moat thanks to switching costs: merchants who have invested time and money in building an online storefront with Shopify won't want to switch easily.

Here's the takeaway: Shopify has many of the qualities required to perform well over the long run, leadership in an industry with fantastic growth prospects, a strong competitive edge, a solid business that generates excellent results, and a competent management team. The e-commerce giant looks like a fantastic growth stock to own for a while.

Prosper Junior Bakiny has positions in Amazon and Shopify. The Motley Fool has positions in and recommends Amazon and Shopify. The Motley Fool has a disclosure policy.