Digital Ads Create a Bright Future for Amazon Stock
Luke Lango | April 11, 2019
When it comes to Amazon, the bull thesis can be summed up in one sentence: Amazon has a built a huge and unparalleled global e-commerce ecosystem, which it is now leveraging to build multiple, valuable tangential-business verticals. Furthermore, the sum of these verticals will power robust revenue and profit growth longer-term and drive Amazon stock meaningfully higher.
The core idea here isn’t hard to understand. Amazon is only scratching the surface of how much it can monetize each one of its 100 million U.S. Prime members. Right now, that includes revenue from Prime and Amazon.com sales. However, management has several expansive options at its disposal.
For example, Amazon can throw digital ads at those 100 million members. They can also sell them pharmaceutical goods, as well as create for them a logistics system. Later, management can outsource that system much like they did with Amazon Web Services. Plus, they can create a parallel offline business, sell more private-label brands, and create better streaming music and video services.