On Monday the S&P/ASX 200 Index (ASX: XJO) was on form again and pushed higher. The benchmark index rose to an 11-month high of 6,824.7 points.

While this is a big positive, some shares are performing even better. Here’s why these ASX 200 shares just hit multi-year highs or better:

Breville Group Ltd (ASX: BRG)

The Breville share price rose to a new record-high of $30.20 yesterday. Investors have been fighting to get hold of the appliance manufacturer’s shares over the last 12 months following its strong performance in FY 2020. A shift to cooking and working at home led to an increase in demand for whitegoods such as cooking equipment and coffee machines. This underpinned a 25.3% increase in revenue to $952.2 million and an 18.2% lift in gross profit to $320.6 million. Pleasingly, at its annual general meeting in November, Breville revealed that its positive form has continued in FY 2021. As a result, it expects its earnings before interest and tax (EBIT) to be in the range of $128 million to $132 million this year. This will be up 13.3% to 16.8% on FY 2020’s EBIT of $113 million.

Coca-Cola Amatil Ltd (ASX: CCL) 

The Coca-Cola Amatil share price climbed to a multi-year high of $13.20 on Monday. Investors have been buying the beverage giant’s shares this month after it provided the market with a trading update. While the company expects its EBIT before non-trading items to be down 13.9% year on year to $550.7 million, an improvement in its performance in the fourth quarter caught the eye of investors. The company’s Managing Director, Alison Watkins, revealed that it experienced a “strong trading performance” during the Christmas period. Also giving its shares a boost in recent months was news of a takeover approach. Coca-Cola Amatil received an unsolicited takeover offer worth $12.75 a share from its European counterparts late last year.

Wesfarmers Ltd (ASX: WES)

The Wesfarmers share price continued its positive run and hit a record high of $54.48 yesterday. The conglomerate’s shares have been in demand with investors thanks to its strong form in FY 2020. The good news is that this strong form has continued in FY 2021. A recent trading update reveals that Wesfarmers achieved strong sales growth across the business during the first four months of the financial year. This was particularly the case with the key Bunnings business, which reported a 25.2% increase in sales during the period. This appears to have positioned Wesfarmers for strong profit and dividend growth this year.

More reading

• Why ASX travel shares like Webjet (ASX:WEB) fell lower on Monday
• 3 top ASX blue chip shares to buy
• ASX 200 Weekly Wrap: Change in America spurs ASX 200 higher
• Morgans picks February’s reporting season ASX heroes to buy now
• Why the Coca-Cola Amatil (ASX: CCL) share price is in focus today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) went up by 0.4% today to 6,825 points.

Here are some of the highlights from the ASX:

Resource shares go higher

One of the top five performers today in the ASX 200 was the Fortescue Metals Group Limited (ASX: FMG) share price in reaction to the profit update at the end of last week when it said that FY21 half-year profit is expected to be in the range of US$4 billion to US$4.1 billion. It also said that preliminary accounts showed it made a net profit after tax of US$940 million in December 2020 alone.

The disclosure came about after Fortescue’s chairman and founder gave a speech, which included plans of Fortescue to become a leader in ‘green hydrogen’ and it’s trying to see if it can make steel using hydrogen rather than coal.

Two other large contributors to the ASX 200 today were the BHP Group Ltd (ASX: BHP) share price which went up just over 1% and the Rio Tinto Limited (ASX: RIO) share price grew by 2%.

Mach7 Technologies Ltd (ASX: M7T)

The Mach7 Technologies share price rose by 9% today.

It announced that it has signed a contract amendment with Adventist Health System/West for the license of the Mach7 PACS (picture archive communication system) solution and associated services.

Mach7 was initially contracted with Adventist in April 2020 to provide its eUnity Diagnostic Viewer and March7 Universal Worklist to Adventist Health Tulare, one of the hospitals in the Adventist Health network.

Mach7’s PACS solution is part of the Adventist PACS replacement program which is being rolled out across all 22 of its hospitals. The contract is valued at over $7.9 million, including migration services and five years of support and maintenance.

The software deployment will occur in stages as software licenses are ordered by individual hospitals in the Adventist Health group. Mach7 said it’s expecting to receive the first of those orders this quarter from three hospitals, which is expected to comprise approximately 7% of the total contract value. Mach7 expects to receive further orders this financial year, with a goal of having the majority of the Adventist Health hospitals using the Mach7 PACS by the end of the 2021 calendar year.

Mike Lampron, the CEO of Mach7, said: “I am delighted to partner with Adventist for their PACS replacement project. The collaborative partnership we have established with Adventist Health has allowed us to help them expand their enterprise imaging growth strategy. I am confident Mach7’s full enterprise PACS solution will provide a flexible and scalable foundation that meets the needs of radiologists across their health network.”

Pointsbet Holdings Ltd (ASX: PBH)

The Pointsbet share price went up by 0.6% today after the company announced that it had appointed ex professional basketballer Shaquille O’Neal, four-time NBA championship winner, as its Australian brand ambassador.

Under the agreement, Mr O’Neal will headline the company’s new 2021 Australian brand campaign, which will roll out across television, digital, mobile and social media.

Pointsbet co-founder Andrew Fahey said: “Shaq is an iconic figure in the worlds of sports and entertainment and was our clear number one pick to represent the PointsBet brand in Australia. US sports, particularly professional basketball, continue to be the fastest-growing betting sport in Australia, and we are very excited to align with such a transcendent athlete.

“Further, we are delighted that Mr O’Neal has agreed to take part of his consideration in the form of equity in Pointsbet, which underscores the alignment and trust across our teams and our shared belief in the opportunities ahead for Pointsbet.”

Mr O’Neal said: “The rise of responsible sports betting is really exciting, and I am so excited to join forces with Pointsbet, the best-in-class partner in Australia when it comes to online sportsbooks.”

More reading

• Why ASX travel shares like Webjet (ASX:WEB) fell lower on Monday
• Why the Fortescue (ASX:FMG) share price is storming higher today
• Leading brokers name 3 ASX shares to buy today
• Here’s why the Mach7 (ASX:M7T) share price just reached a multi-year high
• 2 ASX 200 growth shares to buy

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends MACH7 FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Pointsbet Holdings Ltd. The Motley Fool Australia has recommended MACH7 FPO and Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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It was a soft start to the week for ASX travel shares as coronavirus fears appeared to spark a small sell-off.

The Webjet Limited (ASX: WEB) share price closed the day down 3.8% at $4.77 per share while Qantas Airways Limited (ASX: QAN) shares fell 1.7%.

Why did ASX travel shares fall lower on Monday?

The big news on Monday afternoon was the temporary suspension of the Trans-Tasman Travel Bubble (TTTB).

The TTTB has been in operation since late 2020 which allows New Zealanders to travel into Australia without quarantining, with plans to make it a two-way arrangement in the near future.

All of those arrangements are on hold for now. Australia will now require all arrivals for the next 72 hours to enter mandatory hotel quarantine. New Zealand detected the more contagious South African COVID-19 strain which sparked the latest move.

A woman who reportedly visited 30 venues in New Zealand tested positive for COVID-19 and the South African strain. All arrivals into Australia from New Zealand since January 14 need to get tested and self-isolate. 

The news hit ASX travel shares on Monday with many big names slumping lower.

Alongside Webjet and Qantas, the Corporate Travel Management Ltd (ASX: CTD) share price fell 1.1% lower. Flight Centre Travel Group Ltd (ASX: FLT) slumped 3.3% to $15.10 at the close.

What else happened on Monday?

The latest setback for international travel came as Australian regulators approved the first COVID-19 vaccine for use in Australia. The Therapeutic Goods Administration (TGA) approved the Pfizer-BioNTech vaccine for use in Australia.

However, supply disruptions mean the vaccine rollout has been delayed by a fortnight until late February.

The S&P/ASX 200 Index (ASX: XJO) had a quiet session ahead of the Australia Day public holiday. The benchmark index climbed 0.4% to 6,824.70 points as Wesfarmers Ltd (ASX: WES) shares closed at a new record high.

More reading

• 3 top ASX blue chip shares to buy
• Leading brokers name 3 ASX shares to buy today
• Why Ampol, Flight Centre, Syrah, & Telix shares are dropping lower
• 2 ASX 200 growth shares to buy
• ASX 200 up 0.35%: Afterpay & Appen push higher, big four banks rising

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Grange Resources Limited (ASX: GRR) share price closed 8.82% higher at 37 cents today. This leaves the company’s shares sitting just shy of the 52-week high which it hit in this morning’s trade. 

Today’s share price climb comes after the company released its quarterly update for the three months ending December 31, 2020. 

Quarterly highlights from Grange Resources 

The company reported an increase in pellet sales for the December quarter to 754kt compared with 422kt in September. Thanks to record iron ore prices, the company’s average received payment for the quarter increased to $236.77/t. The average price for the September quarter was $182.49/t. 

Grange Resources reported cash and liquid investments of $202.9 million and trade receivables of $79.3 million for the December quarter. This was a boost from the September quarter which reported $175.5 million in cash and liquid investments with trade receivables totalling $13.5 million.

Commenting on the financial achievements of the quarter, CEO Mr Honglin Zhao said:

“Grange management are happy with the very strong fourth quarter that completed a strong 2020, particularly delivery exceptional sales volume figures in combination with record sales. This is coupled with the production team’s strong performance. The team is to be commended for their efforts and results achieved, especially in the current COVID-19 environment…”

What does Grange Resources do?

Grange Resources is one of Australia’s premier providers of iron ore pellets. The company operates one of the country’s largest integrated iron ore and pellet production businesses.

The three main Grange Resources sites are Port Latta, Savage River and Southdown. 

Port Latta is the Tasmanian-based pellet plant and port facility. It currently produces over 2.2 million tonnes of premium quality iron ore products annually.

The Savage River magnetite iron ore mine is located 70 kilometres from Port Latta in Burnie. The city of Burnie boasts that it produces some of the highest iron-concentrated magnetite in Australia.

Finally, located in Western Australia’s Great Southern region is the company’s joint-venture, Southdown. Combining forces with SRT Australia Pty Ltd, the Southdown Magnetite Project claims to encompass over 1.2 billion tonnes of high-quality mineral resources.

The Grange Resources share price has climbed over 51% in the last 12 months. This compares to the S&P/ASX 200 Index (ASX: XJO) which has fallen 3.75% in the same period. 

More reading

• 3 of the best ASX shares you can buy today
• Why the Autosports (ASX:ASG) share price just smashed its 52-week high
• Clean Teq (ASX:CLQ) share price unmoved by quarterly update
• Why the Noxopharm (ASX:NOX) share price is bouncing up today
• Here’s why the Hammer Metals (ASX:HMX) share price reached a multi-year high

Motley Fool contributor Gretchen Kennedy has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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If you’re currently searching for a few shares to add to your portfolio, then you could do a lot worse than the ones listed below.

Here’s why these ASX shares come highly rated right now:

Kogan.com Ltd (ASX: KGN)

Kogan is one of Australia’s leading ecommerce companies and the country’s answer to Amazon. It has been growing at a very strong rate in recent years and particularly in FY 2021 thanks to the acceleration of the shift to online shopping.

Last year Kogan raised a significant amount of funds via a capital raising. However, unlike many other companies that required funds to keep their operations afloat, Kogan raised the funds for acquisitions. It has since put these funds to work with the acquisition of furniture retailer Matt Blatt and New Zealand-based ecommerce company Mighty Ape. Both should given its sales growth a boost in the second half of FY 2021.

Analysts at Canaccord Genuity are very bullish on its outlook, particularly given the Mighty Ape acquisition. The broker sees significant synergies from the deal. Canaccord Genuity has a buy rating and $25.00 price target on Kogan’s shares.

NEXTDC Ltd (ASX: NXT)

Another ASX share to look at is NEXTDC. It is a leading data centre-as-a-service provider with a growing network of centres in key locations across Australia.

As with Kogan, NEXTDC has been a big winner from COVID tailwinds. On this occasion, it is the acceleration of the shift to the cloud. This has underpinned a significant increase in demand for capacity in its data centres and strong sales and earnings growth.

Looking ahead, the company now has its eyes on the Asian market and has opened up offices in a number of key locations. If this expansion is a success, it would give it a significant runway for growth over the next decade and beyond.

Analysts at Morgan Stanley are positive on the company. They currently have an overweight rating and $14.60 price target on its shares.

Xero Limited (ASX: XRO)

Finally, we have cloud business and accounting software company Xero. It has been growing at a rapid rate in recent years and, pleasingly, this has continued in FY 2021.

In November, Xero released its half year results and reported operating revenue growth of 21% over the prior corresponding period to NZ$409.8 million. This led to Xero’s annualised monthly recurring revenue (AMRR) growing 15% to NZ$877.6 million and was driven by a 19% increase in total subscribers to 2.45 million.

Goldman Sachs is very positive on the company and has a buy rating and $157.00 price target on its shares. The broker believes that Xero has a multi-decade runway for strong revenue growth ahead of it.

More reading

• 5 things to watch on the ASX 200 on Monday
• Top brokers name 3 ASX shares to buy next week
• 2 fantastic ASX growth shares to buy this month
• Why Cleanaway, Crown, Pro Medicus, & Vulcan shares are tumbling lower
• 2 star ASX shares to buy this week

James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd and Xero. The Motley Fool Australia has recommended Kogan.com ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Autosports Group Ltd (ASX: ASG) share price has had a massive few days, trading up 18% since releasing a positive half year update last Thursday.

Shares in the automotive retailer have continued their climb today, trading 13.58% higher and peaking at a 52-week high of $1.84.

Fast recovery

It seems the Autosports share price isn’t the only thing making a speedy recovery. The Australian new car market overall has continued to recover faster than expected over recent months.

According to Vfacts industry data, November saw the overall new car market grow 12.4% higher than the same month in 2019. December 2020 saw this growth continue, up 13.5% on December 2019.

The improved market conditions have been supported with the group’s improving gross margins. This is despite the impact of the stage 4 COVID-19 lockdown in Victoria late last year.

Improved results

The Autosports share price is rising today as the company updated the market on some of its upcoming results.

On a preliminary basis, the company expects that the total revenue for the half year will be approximately $905 million, up 8.2% from the prior corresponding period.

Normalised net profit before tax is expected to fall in the range of $28.5 to $29.5 million. However, this excludes the impact of the costs associated with acquisitions and closed businesses. The impact of the Victoria lockdown on the company was about $7 million.

Nonetheless, the company received approximately $10.4m in Jobkeeper support on behalf of its employees during September 2020.

About the Autosports share price

Autosports is an automotive retailer that focuses on the sale of new and used motor vehicles, sale of aftermarket products and spare parts and motor vehicle servicing and collision repair services.

The company has 42 dealerships selling new and used cars while 3 are solely focused on used car sales. It also has 5 repair facilities.

The Autosports share price has gained 11.2% in the last 12 months, outpacing the 0.2% return of the All Ordinaries Index (ASX: XAO).

More reading

• The latest ASX broker “buy” ideas that got a valuation upgrade

Motley Fool contributor Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Clean Teq Holdings Limited (ASX: CLQ) share price is flat today as the company announced its second quarterly report for the financial year.

Shares in the green materials company are trading at 30 cents at the time of writing, the same price level it was stting on at market open this morning.

Clean Teq is a Victorian company that aims to “empower the clean revolution” by providing specialty materials and clean solutions to a range of industries.

What is driving the Clean Teq share price

In today’s release, the company advised it continues to advance the development of its Sunrise battery materials complex in New South Wales. The company sees Sunrise as a potential beneficiary to the growing tailwinds surrounding electric vehicles.

Clean Teq has a range of works under way at the Sunrise plant to minimise the project restart time when funding is secured. To this tune, the company says the COVID-19 pandemic has presented difficult conditions for obtaining funding for the project.

However, engagement with the automotive and battery sectors for Sunrise remains ongoing. In particular, in the last quarter of 2020, Clean Teq saw “significant interest” from the automotive sector for its supply of both cobalt and nickel.

Also, during the quarter, the company completed the first three drill holes at its Phoenix Platinum zone in NSW. Despite the low grade of resource in the area, the mine remains “one of the largest platinum deposits in Australia”. Platinum has many uses in modern society including in jewellery, electrics and medical/laboratory instruments.

In addition, the company’s two new water treatment contracts in Australia and Oman also helped drive the Clean Teq share price this month.

Renewable energy push

Earlier this month, Clean Teq announced the completion of a study that confirmed the availability and cost of renewable energy to supply 100% of its external power for its Sunrise project. As such the proposal would completely eliminate one third of its total carbon emissions.

The study was undertaken in 2020 in partnership with AGL Energy Limited (ASX:AGL) to identify an alternative energy supply.

About the Clean Teq share price

With the company’s recent capital raising, Clean Teq currently has a cash balance of $44 million.

Looking ahead, the company is considering a demerger of its water division to focus more on battery materials. It has started a formal review of a potential demerger which will provide a recommendation to shareholders in due course. The review will consider taxation, structuring and other regulatory implications.

Despite the challenging conditions of last year, the Clean Teq share price is currently trading 15.38% higher over the last 12 months. And it’s outperforming the All Ordinaries Index (ASX: XAO) by 15%.

More reading

• Top brokers name 3 ASX shares to sell next week
• Why ASX energy shares are under pressure right now
• Which ASX 200 shares have been slapped with price downgrades this week?
• The AGL (ASX:AGL) share price just hit a 12-year low
• Leading brokers name 3 ASX shares to sell today

Motley Fool contributor Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Noxopharm Ltd (ASX:NOX) share price launched up more than 7% today as the company released its report for the fourth quarter December 2020.

At the time of writing, the Noxopharm share price trading up 7.69% at 63 cents.

Let’s take a closer look at the clinical stage drug development company and what we learned from today’s announcement.

What’s lifting the Noxapharm share price today?

Noxopharm told the market today that it received $21.4 million net from the issue of shares during the December quarter. Another $201,000 was gained from shareholders exercising options. This resulted in cash reserves totalling $22.9 million at the end of the quarter.

The company spent a significantly less amount of money on operating activities for the period. Noxopharm reports that net cash used in operating activities during the December quarter amounted to $2.6 million, compared to $3.3 million in the September quarter.

Research and development (R&D) activity costs also dropped down in the December quarter coming in at $1.4 million, compared to $1.6 million for the September quarter.

Looking ahead, Noxopharm expects to receive a cash rebate in excess of $4 million coming from the Federal Government’s R&D tax incentive rebate scheme.

More about Noxopharm 

Noxapharm’s primary focus is on the development of Veyonda to boost the effectiveness of all 3 current methods of cancer treatment: immune-oncology therapy, radiotherapy and chemotherapy.

The company currently has two major clinical programs under way – the DARRT program and the LuPIN program.

According to Noxopharm, the purpose of the programs is “to establish Veyonda as an essential adjunct to radiotherapy in the treatment of prostate cancer”.

The Noxopharm share price skyrocketed 14% earlier this month on news that Veyonda is emerging as a major new treatment based on its ability to support all current methods of cancer treatment.

In addition to the DARRT and LuPIN programs, the company is planning to recruit for a third study, IONIC. Furthermore, Noxopharm’s NOXCOVID-1 study has also been progressing.

More reading

• Why the Noxopharm (ASX:NOX) share price is jumping 14% higher today

Motley Fool contributor Gretchen Kennedy has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Hammer Metals Limited (ASX: HMX) share price is flying today. This comes after the company announced that it has been approved an additional drilling program at the Trafalgar prospect at its Mount Isa East Joint Venture.

During morning trade, the Hammer Metals share price reached a multi-year high of 10.5 cents. However, some apparent profit taking led the company’s shares to retreat to (at the time of writing) 8.9 cents, up 18.6% for the session.

What did Hammer Metals announce?

The Hammer Metals share price is storming higher as investors digest the company’s latest news.

According to its release, Hammer Metals advised that it has been given the green light to drill extra holes at the Trafalgar prospect. This follows on from the recent discovery of copper and gold deposits notified to the market last week. They included:

• 55 metre strike at 1.12% copper (Cu) and 0.30 grams per tonne (g/t) gold (Au) from 119m including 16 metres at 1.77% Cu and 0.49g/t Au from 149 metres in HMTRRC001; and
• 32 metre strike at 1.04% Cu and 0.25g/t Au from 64 metres including 6 metres at 2.38% Cu and 1.45g/t Au from 91 metres in HMTRRC002

The company is planning to commence drilling in opposite directions of the new holes. In addition, a third hole of 80 meters will be drilled north of its HMTRRC001 intercept.

Once the drilling operations have been completed, Hammer Metals will analyse the results, and continue drilling again in April. In addition, the company will also complete drilling works at its Shadow, Toby East, Alpha, Charlie and Juliett prospects.

A quick take on Hammer Metals and Mount Isa

Hammer Metal is a minerals exploration company that is focused on gold, iron ore, and copper projects within Australia.

The Mount Isa project covers an area of roughly 2,200 square kilometres within the district, holding a strategic tenement position. The Trafalgar prospect is part of a Joint Venture agreement whereby Japan Oil, Gas and Metals National Corporation (JOGMEC) is in the process of earning a 60% interest, in return for spending $6 million on exploration activities by March 2024.

About the Hammer Metals share price

The Hammer Metals share price has soared higher over the last 12 months, reaching gains of above 300% for investors.

Its shares hit an all-time low in March but quickly rebounded in the months following. The Hammer Metals share price broke a fresh multi-year high of 10.5 cents today on the back of positive investor sentiment.

More reading

• Why the Noxopharm (ASX:NOX) share price is bouncing up today
• Better buy: Amazon.com vs. Google
• 3 top ASX blue chip shares to buy
• 2 ASX healthcare shares to buy this week
• The Ecograf (ASX:EGR) share price is surging 9%. Here’s why

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Amazon.com Inc (NASDAQ: AMZN) and Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) are two of the largest and most successful companies in the world. Google has become synonymous with search, and Amazon’s marketplace is the epitome of consumer convenience. And both of these titans have outperformed the S&P 500 Index (SP: .INX) over the last one, three, five, and 10 years — though Amazon’s stock soared 815% over the last decade, far outpacing Alphabet’s 235% gain. Which stock is the better investment today?

E-commerce and digital advertising

Alphabet’s primary source of revenue comes from its Google business, specifically the digital advertising segment. This is driven by Google’s utter dominance among search engines — Google’s market share has consistently been near 90% over the last decade. This has allowed the company to collect a tremendous amount of data, making its ad buying and selling tools immensely popular among marketers. As a result, Google consistently captures more than 30% of global digital ad spend.

By comparison, Amazon generates the majority of its revenue through its e-commerce business. The company commands roughly 39% of the e-commerce market in the U.S., while Walmart is the next-closest competitor with a mere 5% market share. While this business comes with much lower margins than Google’s ad business, Amazon’s highly profitable cloud computing business helps pick up the slack, giving the company a tremendous advantage over other online retailers.

Additionally, Amazon is aggressively moving into digital advertising, and the company appears to be taking market share away from Google. Investors should note that Amazon has many of the same advantages as leaders like Google and Facebook, including troves of consumer data, tools to help marketers buy ads and publishers monetize ad space, and various content platforms like Fire TV and Amazon.com where it can sell its own ad inventory. As a result, Amazon’s share of digital ad spend in the US jumped 2% in 2020, while Google’s fell 2%. 

Company	2019 Market Share	2020 Market Share
Google	31.6%	29.4%
Amazon	7.8%	9.5%

Data source: eMarketer.

Google is still the leader by a long shot, but Amazon has a history of disrupting the status quo. The company’s online marketplace and streaming platforms (Fire TV and Twitch) are popular content hubs, and could be powerful growth drivers for Amazon’s ad business in the coming years.

The cloud business

According to research firm Gartner, both Amazon Web Services (AWS) and Google Cloud Platform (GCP) are market-leading providers of cloud infrastructure and platform services. But while both companies offer storage, computing, databases, analytics, and other tools, Amazon launched its cloud computing service two years ahead of Google, and it has never given up that lead. Today, AWS still has a more comprehensive offering and has achieved wider adoption. In fact, AWS is the world’s leading cloud services provider, taking 32% market share in the third quarter of 2020 compared to Google Cloud’s 7% market share. As you might expect, this means AWS generates much more revenue, though Google Cloud is growing faster.

Company	First 9 Months of 2019	First 9 Months of 2020	Change
GCP revenue	$6.3 billion	$9.2 billion	46%
AWS revenue	$25.1 billion	$32.6 billion	30%

Data source: Alphabet and Amazon SEC filings. 

The future

Amazon could easily make a strong move into gaming and e-sports. Amazon Games is the company’s in-house game development studio, and with AWS for content delivery and Twitch as a way to engage gamers and monetize e-sports, it’s not hard to imagine Amazon as a serious competitor in this space.

What’s more, if Amazon does aggressively pursue this multi-billion dollar market, the company would likely be more profitable than other gaming companies — that’s because Amazon already owns the infrastructure and tools needed to build  games and host content, whereas 90% of the world’s largest public game companies actually rely on AWS for these services.

In other words, this could be a very high margin business for Amazon. To keep track of the company’s foray into gaming, investors should pay attention to Amazon Games’ upcoming release of New World in May 2021. 

Alphabet, on the other hand, has its “other bets” business, which includes Waymo, the company’s self-driving car company. According to Swiss investment bank UBS, the autonomous vehicle market could be worth $2.8 trillion by 2030, and Waymo is well positioned to take a good chunk. The company’s autonomous vehicles have already logged over 20 million real world miles, far outpacing the competition, and Waymo recently started offering ride hailing services to the general public in Phoenix. If this moonshot pays off, it could create another enormous revenue stream for Alphabet, perhaps even surpassing that of its Google business.

The verdict

Investors should pay attention to both companies’ ability to sustain revenue growth over the long run. Together, these titans are worth over $3 trillion, and growth tends to slow as businesses mature.

However, Alphabet and Amazon are both innovative, well-managed companies with deep pockets and bright futures — I don’t think investors can go wrong with either one. That being said, I think Amazon has an edge here. The company has two different market-leading businesses, which is an incredible accomplishment. Moreover, Amazon has a larger addressable market , and the company is growing faster than Alphabet as a whole. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Trevor Jennewine owns shares of Amazon. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, and Facebook and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, and Facebook. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Better buy: Amazon.com vs. Google appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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