Several investors might not be willing to buy stocks right now as markets are near record highs. The snapback rally since March has been primarily driven by technology stocks that have been relatively immune to the virus.

However, there are multiple uncertainties that will impact the equity markets in the near-term. These include a rise in COVID-19 infections, high unemployment rates, and no clarity over stimulus plans.

Alternatively, long-term investors can look to buy stocks with strong fundamentals and rapidly expanding addressable markets. Here, we look at three such stocks that remain attractive despite their steep valuation.

A trillion-dollar heavyweight

The first company on the list is Amazon (AMZN) , a tech giant that has been a solid wealth creator in the last decade. Amazon remains one of the most popular stocks on Wall Street and for good reason.

The company is the largest online retailer in the world and is also the largest public cloud infrastructure company. It is the third-largest digital ad platform and leads the streaming (gaming and traditional) market too.

According to a report from e-Marketer, Amazon will own 38.7% of the online sales market in the U.S. in 2020 and this figure will inch closer to 40% next year. The pandemic has accelerated the shift towards digital sales, driving Amazon’s top-line growth significantly higher in 2020.

In Q3, the company’s sales growth stood at a stellar 37% and it might end 2020 with $377 billion in sales, up 34% compared with 2019. This rise in top-line has allowed Amazon to double operating income in Q3 while its free cash flow rose to $6 billion in the last 12-months.

E-commerce still accounts for just 13.5% of retail sales in the U.S. and this number will be much smaller in other economies, giving Amazon enough room to increase top-line in the upcoming decade.

A retail giant

The next company is Lululemon Athletica (LULU), whose stock has gained close to 60% year-to-date. Lululemon is expected to release its Q3 results on December 10 and analysts expect its sales to grow by 9%, up from just 2% in Q2.

Similar to most other retail companies, Lululemon was impacted by the COVID-19 pandemic. As its retail stores were shut, the company managed to offset a great part of this decline via online sales. In Q3, e-commerce sales surged by a significant 155% year-over-year for Lululemon.

The e-commerce segment is far more profitable as well with an operating margin of 42%, compared with the 27% figure for retail stores. In Q2, while the DTC (direct-to-consumer) profits were $237 million, physical stores reported a loss of $5.3 million.

However, retail stores remain a key driver of top-line growth for Lululemon and investors can expect the stock to surge higher once COVID-19 related restrictions are relaxed.

During its last earnings call, the company said it has opened 492 out of its 506 locations all around the world. But has the recent rise in coronavirus infections in North America and Europe resulted in a significantly lower footfall and retail store traffic?

A Latin-America growth stock

The final company on the list is MercadoLibre (MELI), a stock that has more than doubled in 2020. In the third quarter, MercadoLibre reported net revenue of $1.1 billion, up 85% year-over-year. The company attributed its revenue growth to higher e-commerce sales. This stellar growth helped MELI to post a net income of $83.1 million, compared with a net loss of $81.9 million in the prior-year period.

In Q3, the company’s active users were up 92% at 76.1 million. It added 16.8 million unique users in the September quarter. Comparatively, its gross merchandise volume soared 62.1% to $5.9 billion while total payment volume was up 91% at $14.5 billion. This is another company that continues to benefit from the e-commerce revolution amid COVID-19.

MercadoLibre has multiple growth drivers and has an established presence in Latin America. The rise in purchasing power of Latin Americans and the penetration of online sales should make it one of the top-performing stocks right now.

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AMZN shares were trading at $3,152.10 per share on Wednesday morning, down $25.19 (-0.79%). Year-to-date, AMZN has gained 70.58%, versus a 16.46% rise in the benchmark S&P 500 index during the same period.

About the Author: Aditya Raghunath

Aditya Raghunath is a financial journalist who writes about business, public equities, and personal finance. His work has been published on several digital platforms in the U.S. and Canada, including The Motley Fool, Finscreener, and Market Realist. More...

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