Amazon Boosts Prime Benefits With Grubhub Partnership, Takes Aim At Walmart
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 30 2024
0mins
Should l Buy AMZN?
Source: Benzinga
- Amazon Offers Free Grubhub Subscriptions: Amazon now provides Prime members with free Grubhub subscriptions, making it a permanent benefit for users.
- Potential Impact on Grubhub Sale: The deal could increase the appeal of Grubhub to potential buyers as Just Eat Takeaway looks to sell it.
- Amazon's Prime Membership Growth: In 2023, 167 million Amazon customers in the U.S. subscribed to Prime, representing 71% of all users in the country.
- Competition and Prime Benefits: Amazon is enhancing Prime benefits to attract and retain members amidst competition from Walmart and Target.
- Amazon Stock Performance: Amazon stock gained 50% in the last 12 months, with analysts highlighting retail margin expansion and GenAI revenue as key drivers.
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Analyst Views on AMZN
Wall Street analysts forecast AMZN stock price to rise
44 Analyst Rating
41 Buy
3 Hold
0 Sell
Strong Buy
Current: 199.600
Low
175.00
Averages
280.01
High
325.00
Current: 199.600
Low
175.00
Averages
280.01
High
325.00
About AMZN
Amazon.com, Inc. provides a range of products and services to customers. The products offered through its stores include merchandise and content it has purchased for resale and products offered by third-party sellers. The Company’s segments include North America, International and Amazon Web Services (AWS). It serves consumers through its online and physical stores and focuses on selection, price, and convenience. Customers access its offerings through its websites, mobile apps, Alexa, devices, streaming, and physically visiting its stores. It also manufactures and sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, Ring, Blink, and eero, and develops and produces media content. It serves developers and enterprises of all sizes, including start-ups, government agencies, and academic institutions, through AWS, which offers a set of on-demand technology services, including compute, storage, database, analytics, and machine learning, and other services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Strong Financial Results: Despite narrowly missing earnings expectations, Amazon reported a 14% year-over-year revenue increase to $213 billion in Q4, driven by robust growth in advertising and cloud computing, highlighting the company's competitive position in rapidly growing markets.
- Capital Expenditure Plans: Amazon plans to increase capital expenditures to $200 billion by 2026, a 56% rise from $128 billion in 2025, raising investor concerns about the company's financial health, particularly regarding its significant investments in AI infrastructure.
- Accelerating Cloud Growth: Amazon Web Services (AWS) saw a 24% revenue increase in Q4, the fastest growth in 13 quarters, with CEO Andy Jassy noting that the custom chip business has surpassed a $10 billion annual revenue run rate, indicating that AI investments are beginning to yield returns.
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- AWS Growth Acceleration: Amazon's cloud computing platform, AWS, grew at a pace of 24% in Q4, marking the fastest growth in 13 quarters, highlighting its critical role in AI model development and enhancing Amazon's competitive position in the market.
- Valuation Pullback Justified: Despite significant revenue and earnings growth, Amazon's stock has declined by approximately 7% since 2025, with its PE ratio dropping to 26.5 times, reflecting a market reassessment of its valuation, potentially providing a reasonable buying opportunity for investors.
- Capital Expenditure Plans: Amazon plans to invest $200 billion in capital expenditures in 2026, primarily for data center construction, which may impact cash flows; however, if AI computing demand continues to grow, this investment will support future business expansion.
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- Surge in Capital Expenditures: Google anticipates capital expenditures of $175 billion to $185 billion by 2026, while Amazon expects $200 billion, reflecting both companies' commitment to future AI infrastructure despite market concerns about an AI bubble.
- Valuation Comparison: Although Amazon's valuation is relatively lower, both companies are at the top of their respective industries, with projected revenue growth rates for the next 12 months showing Google at 16%, slightly ahead of Amazon's 12%, giving Google a slight edge in investment attractiveness.
See More
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- Record Backlog: The company's backlog for AI switches has surpassed $10 billion, reflecting robust market demand amid ongoing AI data center buildouts, which further solidifies Broadcom's position in the industry.
- Differentiated Product Offering: Broadcom has launched the industry's first Wi-Fi 8 access point and switch system, designed to enhance security and speed for enterprises utilizing AI, thereby increasing its competitive edge and attracting more customers.
- Unique Market Positioning: Broadcom's XPUs are custom chips tailored for specific purposes, differentiating them from Nvidia and AMD's general-purpose GPUs, allowing the company to carve out a niche in the competitive AI market and enhancing its strategic positioning for future growth.
See More
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- Indirect Stock Holdings: By owning shares of Berkshire, investors can indirectly hold positions in five other stocks, including Apple, Alphabet (Google's parent), Amazon, Chevron, and Mastercard, thereby achieving broader market exposure.
- Strong Long-term Prospects: Berkshire's portfolio also includes companies like American Express, Coca-Cola, and Visa, which have solid long-term growth potential, enhancing its investment appeal.
- Management Stability: Although Warren Buffett is no longer CEO, he remains confident in the company's future and believes that under Greg Abel's leadership, Berkshire's prospects will improve, demonstrating the stability of its governance and potential for continued growth.
See More
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- Interest Rate Policy Impact: Following the Fed's interest rate cuts that began in 2024, the recent decision to hold rates steady has heightened investor concerns over uncertainty, leading to diminished confidence in tech stocks, despite strong earnings reports from companies like Meta and Taiwan Semiconductor.
- Valuation Level Warning: The S&P 500's Shiller CAPE ratio has surpassed 39, a level only reached once before, just prior to the dot-com bubble burst, indicating that current market valuations are high and may signal potential future correction risks.
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See More
