This Means More Gains For AMZN Stock
Amazon.com, Inc. (NASDAQ:AMZN) stock has been making new records of late, and it hit another milestone on Wednesday.
Amazon stock closed at $844.36 in the last trading session, which was an all-time high. The company keeps expanding and improving the suite of its products and services, and there came another announcement yesterday, which further boosted AMZN stock.
Amazon.com launched “Prime Reading” on Wednesday. Now “Amazon Prime” members can access a variety of books and magazines at no additional charge, even if they don’t own one of the company’s “Kindle” e-readers or “Fire” tablets. This new service enables members to read from a selection of over a thousand books, magazines, comics, etc. without the requirement of any Kindle device. They can read on any device with a Kindle app for “iOS” or “Android.” (Source: “Amazon launches reading feature for U.S. Prime members,” Reuters, October 5, 2016.)
The new benefit is just another in the long list of existing benefits like “Prime Shipping,” “Prime Music,” and “Prime Video” for Amazon Prime subscribers. The company had also launched “Twitch Prime” last weekend and offered free subscriptions to Prime members, which also included free game downloads. What the company is trying to achieve with its Prime service is really significant. Amazon.com is building the case that it would not make sense for someone to not be an Amazon Prime member.
This is a clear indication of how Amazon Prime is seen as the growth engine of the company. Analysts have been optimistic about the growth and potential of Prime, as the service has seen strong growth in subscribers over the last quarters.The rise in the subscriber base of Prime service had been a major reason for the uptrend in AMZN stock.
Amazon stock had posted impressive gains following its strong results for the second quarter announced in July this year. The e-commerce giant had also reported that the Prime subscription service had reached 60 million members in the United States. Morgan Stanley (NYSE:MS) expects this number to reach 100 million by 2018, up from its previous forecast of 88 million. (Source: Ibid)
The Bottom Line for Amazon Stock
Now that the company has become a force to reckon with in the retail business, the competition is catching up with Amazon.com. However, this does not seem to have had any negative impact on AMZN stock yet.
As investors look forward to the next quarterly earnings, they will also be looking at more clues on how Amazon can stay ahead of its competitors, with Google (Alphabet Inc (NASDAQ:GOOG)) just launching “Google Home” and Wal-Mart Stores, Inc. (NYSE:WMT) upping its e-commerce game. Amazon.com has seen many ups and downs, but the company manages to introduce new products and services and build a loyal customer base. This focus on customers is likely to generate more profits for the company and provide further pushes to AMZN stock.