Amazon.com, Inc. (AMZN) Stock Is a Buy With or Without Amazon Go

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Amazon.com, Inc. (NASDAQ:AMZN), like its tech cousins Apple Inc. (NASDAQ:AAPL) and Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL), always has a reason to be in the news. But those reasons aren’t always relevant to investors. The key to successfully investing in tech behemoths like AMZN stock is the ability to decipher noise from substance.

Amazon.com, Inc. (AMZN) Stock Is a Buy With or Without Amazon Go

With Amazon stock, the latest buzz comes courtesy of the announcement of Amazon Go. Despite the fact that AMZN hangs its hat on being the biggest of the e-commerce big dogs, the company is taking (another) whirl at the brick-and-mortar world.

As you may remember, Amazon stock got its start as an online bookseller, yet recently launched a physical bookstore. AMZN has also attempted grocery delivery in the past and now, it has launched the beta version of a physical grocery store.

What Can Amazon Go do for AMZN Stock?

The twist: Its fancy technology. These stores are like those mini-bars in Vegas: you don’t have to checkout or bring your wallet, but you still get charged for the items you grab. The perk, according to Amazon, is that no lines are needed. The question, of course, is whether its Utopian grocery store vision will match the reality.

I’m not so sure.

But I’m also not totally sure execution is the point for AMZN stock. See, this grocery store in a sense is like a pop-up shop to remind consumers that Amazon is synonymous with shopping — and not just any shopping, but anytime, anywhere shopping — and also synonymous with the hottest tech there is to offer.

Consumers don’t get to see the e-commerce giant used sophisticated technology to update its infrastructure and run Amazon Prime smoothly, except when AMZN makes a push to showcase its innovation with things like drones or, say, checkout-less grocery stores.

The one downside is that a brick-and-mortar investment is a big one for Amazon stock; real estate and upkeep don’t come cheap. But at this stage, the company just has one beta location (in Washington, of course), and it is hardly a stranger to focusing on high-profile moonshots.

The difference now, though, is that its main businesses are more established than ever, from Amazon Web Services to its e-commerce core and even to its streaming content business.

Bottom Line for Amazon Stock

I don’t think Amazon Go amounts to much more than a marketing ploy. But I think it’s a pretty darn good one, just as I think AMZN stock continues to be a pretty darn solid investment.

In case you forgot, Amazon stock is slated to post 42% annual earnings growth long-term, on ever-consistent sales growth, which is north of 20%. And while it posted an earnings miss in the most recent quarter, its a far cry from unprofitable — and that was the Amazon narrative (and a bullish one at that) for several years.

The holiday season is just around the corner and we know all the technology powering Amazon Go will also be powering seemingly endless online shopping orders. AMZN stock is a king, which gives it the resources and power to toss out a venture like Amazon Go. However, Amazon stock investors should focus on the former half of that reality as opposed to the latter.

If they do, they won’t be disappointed.

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.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/12/amazon-com-inc-amzn-stock-buy-without-amazon-go/.

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