AMZN Stock: Amazon.com, Inc. Should be Feared

AMZN StockAmazon.com Dives Deeper into Your Wallet

I was quite bullish when I last wrote about Amazon.com, Inc. (NASDAQ:AMZN) a few weeks back, but now I’m more convinced that AMZN stock will be the next $1,000 stock.

I said that Amazon.com, Inc. should be viewed as a disruptive stock within the mass-retail segment. Just take a look at retailers like Wal-Mart Stores, Inc. (NYSE:WMT) and you’ll understand why AMZN stock is the major threat in the retail space.

But not only should companies like Wal-Mart be on guard against the aggressive expansion motives behind Amazon.com, Inc., but many others should take note.

For example, I talked about the Amazon.com, Inc. testing of its online grocery service in selected cities, but the company subsequently announced it would launch brick-and-mortar convenience stores. This is big news, and sends a message to the grocers out there that AMZN stock wants a bigger piece of the pie, and that’s scary.

The Amazon convenience stores are initially targeted to sell perishable items such as meats, fruits, and milk, along with the ability for customers to pick up online orders. The big threat in the grocer segment is that Amazon.com, Inc. could be testing out the idea of establishing much bigger full-fledged grocery stores in the future.

In other words, companies like Whole Foods Market, Inc. (NASDAQ:WFM), Kroger Co. (NYSE:KR), and others better be on guard. Now there is no proof that Amazon.com, Inc. is looking at this strategy, but I wouldn’t be surprised, especially if the initial foray into its first brick-and-mortar stores pan out.

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Chart courtesy of StockCharts.com

Why Retailers Should Fear Amazon.com 

What Amazon stock has on its side is tons of cash, a disruptive online presence with many established relationships in the retail segment, and an ambitious CEO Jeff Bezos, who wants to dominate the retail space, whether it’s groceries, books, or electronics.

Amazon.com, Inc. has tens of millions of customers it wants to cross-sell to. These people want to spend, and AMZN stock wants their funds. It’s becoming clear that Amazon.com, Inc. wants to build a retail ecosystem for its massive user base. This is smart thinking that will propel Amazon stock higher.

Not stopping with groceries, Amazon.com, Inc. also announced it wants to sell you on-demand music. Watch out Apple Inc. (NASDAQ:AAPL), Pandora Media Inc (NYSE: P), and Spotify AB; there’s a new player in town.

Amazon.com, Inc. announced it would offer “Amazon Music Unlimited,” an on-demand steaming music service that could really disrupt the online music segment.

“Amazon Music” is not only available via the Amazon Music app, but it will also be connected to the newly launched “Echo” home management unit. So, not only will you be able to control “Bluetooth” connections in your home, but you can listen to music.

So while retailers try to find ways to sell more, Amazon.com, Inc. is looking at expanding into other segments that allow it to cross-sell to its millions of users. With Jeff Bezos at the helm, you never know what area he will move Amazon.com, Inc. into next.