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Amazon Could Make Smaller-Scale Purchases In AI/Machine Learning, AR/VR, Cloud

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Amazon Could Make Smaller-Scale Purchases In AI/Machine Learning, AR/VR, Cloud
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Amazon.com, Inc. (NASDAQ: AMZN) acquisition of Whole Foods Market is now officially complete, which means many investors are pondering what's next for the online giant that now boasts a physical retail space.

Unfortunately, the answer is Amazon likely doesn't have any large-scale acquisition plans for the near term, Baird Equity Research's Colin Sebastian's commented in a research report. Amazon will stay true to its "disciplined" acquisition strategy and will likely now focus on optimizing its Whole Foods acquisition, which fits in with its multi-channel grocery strategy.

The acquisition of Whole Foods will replace some store visits for Prime members through Amazon Fresh, but at the same time, many Prime users prefer "pick-up points" or to buy their food in-store, the analyst continued. This can create "cold chain efficiencies" that will help Amazon increase its overall scale in all aspects of the grocery store, from online to delivery and in-store.

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Moreover, the integration of Prime with Whole Foods will likely result in share gains within the under-penetrated grocery category and also represent a "Prime member acquisition tool," Sebastian also noted.

Finally, Amazon could still be open to overseeing small-scale opportunistic acquisitions in areas such as artificial and augmented reality, cloud, machine learning, and artificial intelligence.

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Latest Ratings for AMZN

DateFirmActionFromTo
Sep 2018Stifel NicolausMaintainsBuyBuy
Sep 2018JefferiesMaintainsBuyBuy
Sep 2018Wells FargoMaintainsOutperformOutperform

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