Why Haven’t You Bought Amazon.com, Inc. (AMZN) Stock Yet?

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AMZN stock - Why Haven’t You Bought Amazon.com, Inc. (AMZN) Stock Yet?

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At one point, it would be unimaginable that Amazon.com, Inc. (NASDAQ:AMZN) and Wal-Mart Stores, Inc. (NYSE:WMT) would become partners.

Why Haven't You Bought Amazon.com, Inc. (AMZN) Stock Yet?While we’re at it, let’s throw in Target Corporation (NYSE:TGT) and Best Buy Co Inc (NYSE:BBY), current Amazon competitors, as potential customers of Jeff Bezos.

These possibilities sent AMZN stock to a new all-time high Thursday. But Amazon’s partners will need to adjust to a drastically changed retail environment in which Amazon is the hands-down leader.

Amazon Plays to Win

A report by the Wall Street Journal Tuesday suggested that Amazon is prepping its own shipping business. The e-commerce giant has made it known that it wants to not only diversify its revenue streams, it also want to “supplement” what we’ve come to accept as regular delivery services from the likes of United Parcel Service, Inc. (NYSE:UPS) and FedEx Corporation (NYSE:FDX). Except there’s one problem: Both UPS and FedEx are vital Amazon partners.

While Amazon has tiptoed the line to say it wants to “supplement” existing delivery services and not replace them entirely, CEO Jeff Bezos is known to play to win. His aggressiveness has sent AMZN stock soaring just shy of 70% over the past year.

Recall, at one point Amazon Web Services was merely a “hobby” supplementing the retail business. AWS has since grown to become the market’s cloud leader, which is now being chased by Microsoft Corporation (NASDAQ:MSFT).

And with the Journal reporting that Amazon is gearing up to build a massive delivery network, it’s only a matter of time before UPS and FedEx feel a major business disruption. Although, both are the clear-cut leaders in terms of package delivery and logistics, neither can compete with Amazon in terms of technological capabilities.

In that vein, if Bezos can find a way to create a business around “logistics-as-a-service” that exceeds delivery times, while lowering shipping costs, why wouldn’t Walmart or Best Buy listen to what Amazon has to offer? It would be in their best interest if they care about preserving profit margins. If nothing else, AMZN not only would have disrupted the existing duopoly between UPS and FedEx, it would reduce the dependence it has on other delivery services.

Bottom Line on AMZN Stock

Efficient delivery, speed and the cost it requires to get a package from one place to another is now the deciding factor among consumers. A roll of paper towels from Wal-Mart and Target may cost the same, but who can get it to your doorstep quicker and at a cheaper rate? This is what Amazon understands. Delivery speed can become more important than price, in some cases.

Betting against Amazon and AMZN stock continues to be a foolish game. Despite concerns about high valuations against its razor-blade business model, AMZN seemingly has no ceiling. Amazon stock has added 5% in five days and 8% this month.

Considering Bezos’ desire to “supplement” Amazon’s revenues, AMZN stock should now be owned, not traded.

As of this writing, Richard Saintvilus did not hold any a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/09/amzn-stock-amazon-com-inc-nasdaq/.

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