As you likely remember, Amazon.com, Inc. (AMZN) was a clear tech winner last year, with shares of Amazon stock gaining almost 120% from start to finish. But even the darling of all tech darlings couldn’t dodge the market’s slow start to 2015.
While Amazon stock has ridden the recent rally to a 16% recovery over the last month, that still leaves shares around 18% lower than they were at the beginning of the year.
At the moment, AMZN stock is sitting just above its 200-day moving average and just below its 50-day moving average. If the two converge, they could act as a floor — especially if the market’s rally continues.
However, the fact that Amazon stock has more or less mirrored the trend of the broader market suggests selling and buying isn’t the result of some change in fundamentals, which is promising.
Amazon stock was a darling last year for good reason. The company’s sales growth continues to be strong, estimates for earnings growth are impressive and innovation remains the name of the game at the tech behemoth.
Amazon began as a bookseller, evolved into the king of e-commerce and now is associated with everything from cloud computing to content to drones. As long as that innovation keeps up, there’s a good chance the company’s solid results will do the same, which in turn should keep investors loving AMZN over the long haul.
And based on recent headlines, there’s plenty in the works at Amazon. Take a look at a few recent pieces of news that show innovation is more than alive at this tech leader.
What’s New For Amazon Stock
Air Freight: One of Amazon’s biggest focuses is its supply chains, especially as Prime’s two-day shipping (and other offerings with even faster shipping) become a bigger and bigger part of the business. To that end, Amazon just signed a five-to-seven year lease for 20 Boeing 767 planes to support the Amazon Fulfillment Center in the United States. According to USA Today, this is “part of what appears to be a broader plan by the company to build out its own delivery system worldwide.”
Virtual Reality: A recent Amazon job posting pointed out by UploadVR shed light on another area of focus for Amazon. The posting says:
“ The Virtual Reality team will explore and create the platform and interface for immersive storytelling. This will include an ingestion and playback platform for Virtual Reality experiences.”
So while companies like Facebook Inc (FB) and its Oculus Rift tackle the hardware side of VR, Amazon is looking to tackle the content side, which should be a lucrative space for the first mover in.
Live Talk Show: Speaking of content, Amazon’s streaming continues to battle rivals like Hulu and Netflix, Inc. (NFLX). Man in the High Castle was the most popular Amazon Prime show yet, but the company isn’t sitting still. Now, Amazon is attempting to tie its video content back to its e-commerce platform with a nightly show called Style Code Live. Besides the fashion focus, the main difference is that this show is available to all members, not just Primers.
New App Store: Think we’re done? Think again. Amazon has also released a new app store and, according to WIRED, it’s growing exponentially. The key difference here is that Amazon Underground, as the store is called, doesn’t charge you for apps or even offer them for free then spam you with in-app purchases. Instead, you simply download an app, then Amazon pays the developer based on time spent playing. Growth has been strong thus far and could spur changes on other platforms if it continues.
The Echo: Last but not least, we have to talk about the Amazon Echo. You likely saw some commercials for the gadget — a voice-controlled household computer — around the holidays, but did you see that The New York Times recently wrote a rave review about the Echo and all its possibilities? The Echo could come to dominate the home, which is why some estimate it could be Amazon’s next billion-dollar business.
Add it up, and it’s clear Amazon has plenty in the works to keep innovation alive, keep customers buying and, in turn, keep investors buying as well.
Whether you want to focus on its gadgets, app store or supply chain, there’s plenty to beef up the bull case for Amazon stock.
Hilary Kramer is the editor of GameChangers, Breakout Stocks Under $10, High Octane Trader, Absolute Capital Return and Value Authority. She is an accomplished investment specialist and market strategist with more than 25 years of experience in portfolio management, equity research, trading, and risk management. She has extensive expertise in global financial management, asset allocation, investment banking and private equity ventures, and is regularly sought after to provide her analysis on Bloomberg, CNBC, Fox Business Network and other media.
