Best Prime Day Ever? Here Are the Prime Winners Riding the Wave
Data from Amazon (NASDAQ: AMZN) and Adobe (NASDAQ: ADBE) reveal that this year’s Prime Day event was the largest on record, driving a nearly 30% increase in online sales across the retail sector. Originally a limited event isolated to Amazon, Prime Day now spans four days and is compounded by sales events at other retailers, who also benefit from the boost. Names like Walmart (NYSE: WMT), Target (NYSE: TGT), Best Buy (NYSE: BBY), and Kohl’s (NYSE: KSS) are stand-outs that also offered deals, and winners exist across the retail industry.
Consumers Flock to Prime Day Deals
Among the details released by Adobe are that Americans made more than one trillion visits to U.S. websites hosting over 100 million stock-keeping units (SKUs) in 18 categories. In many cases, consumers were shopping up, choosing higher-quality and higher-ticket items in greater quantities; total traffic and sales amounted to more than two Black Fridays. This makes the Internet and e-Commerce infrastructure companies likely beneficiaries, and Visa is the leading choice.
Visa (NYSE: V) is accepted by roughly 97% of U.S. e-commerce merchants, making it the number one choice for transactions nationwide. Other payment processors exist, including PayPal, which is also a likely beneficiary. Regarding Visa, the bar is set high for Q2, with analysts lifting targets during the quarter; however, outperformance is likely, and the guidance will be favorable due to consumer trends and the Prime Day event.
PayPal (NASDAQ: PYPL) faces competition in 2025 but is well-positioned with roughly 45% of the e-commerce market share, accepted by roughly 36% of digital merchants. It is expected to grow in 2025 at a low-single-digit pace driven by active user growth and deepening penetration of services. Other drivers include Venmo, which allows for easy, seamless, peer-to-peer and merchant transactions.
As of mid-July, the consensus expects a bigger upside for PayPal's stock price, although the trend appears more bullish for Visa. While PayPal is forecasted to rise by 18% at the consensus, its analysts' sentiment cooled in H1, while Visa’s warmed. Visa analyst trends include increased coverage, firming sentiment, and a rising price target with 15% upside forecast at the high-end range.
Shopify: Connecting Merchants and Consumers Together
Shopify (NYSE: SHOP) isn’t just a website builder for e-commerce solutions. It is an end-to-end solution for e-commerce that scales with business growth, facilitating cross-border transactions, and serves as a gateway to accelerated growth. Trends in 2025 include a lean into AI-facilitated operations and services, sustained high-double-digit growth, and outperformance. Business drivers include increased client counts, deepening penetration, and volume gains in the low-20% range. Regarding market share, Shopify commands roughly one-third of U.S. sales and is growing.
Analysts trimmed their price targets for Shopify earlier in the year, capping gains for the market. However, the 43 tracked by MarketBeat provide a solid support base for this stock and view it as fairly valued near mid-July price points. Another quarter of strong results will reinvigorate the group, and a strong quarter is likely. As it stands, the consensus is for revenue growth to slow to only 24% in Q2. Outperformance is expected because of the revision trend, as most analysts have lowered their estimates over the past three months and due to the strength of e-commerce sales.
Walmart to Lead Retail Growth in Q2
Walmart will lead the retail sector for growth in Q2 and provide solid guidance.
The addition of strong Prime Day sales bolsters the outlook and increases the expectations, which are already solid.
Analysts are forecasting $174 billion in net revenue, sufficient for a sequential and YOY acceleration and substantial margin, with strengths in its in-store, digital, and membership club channels.
Retailers like Target and Kohl’s will likely lose market share to their larger competitors; off-price names like TJX Companies (NYSE: TJX), which are working to improve digital sales, are also well-positioned for growth in 2025.
