Amazon Is Poised For Its Most Innovative Decade Yet

The dramatic rise in Amazon.com Inc AMZN shares to new all-time highs has brought the company's market cap above $1.5 trillion.

The stock's approximately 70% rise year to date is due to the company's position as an all-encompassing web giant uniquely situated to benefit from the professional world still in work from home mode. But investors are also intrigued by the new markets that Amazon is pushing into. 

Groceries

Back in 2017, Amazon showed it is determined to make its footprint in the grocery business by acquiring Whole Foods. In buying Whole Foods, Amazon gained a well-known brand and more than 400 stores that now come with a free delivery option for Amazon Prime members. Moreover, the e-commerce giant plans to open its own branded supermarket in Los Angeles which would benefit from its "Just Walk Out" technology.

Though Amazon still has a small share of grocery sales, it is betting big on this segment. Last year, grocery stores in the U.S. generated $682 billion in revenue. Although grocery shopping was quite resistant to the online shift in the past, COVID-19 has turned things around, with Walmart Inc WMT and The Kroger Company KR also building on their e-commerce efforts.

Healthcare

Amazon's 2018 acquisition of online pharmacy Pillpack for $1 billion paved the way for a joint venture between them, Berkshire Hathaway (NYSE: BRK-B) and JPMorgan Chase JPM. That was followed up by the launch of Amazon Care in 2019, which provides Amazon's employees with telehealth services. After COVID-19 swept through the globe, Amazon revealed in April it is working on developing its own test to help ensure the safety of its warehouses. Although this was meant to be used by its employees, this diagnostic move could contribute to establishing the company in the healthcare segment if the tests become available to the general public.

Logistics

Delivery is central to Amazon's value proposition, so logistics is a natural extension to its business. Among its latest step to build out its logistics chain, Amazon acquired Zoox last month for a reported $1.2 billion. The move is focused on developing the driverless taxi technology that Zoox is known for and autonomously transporting packages that could greatly enhance Amazon's logistics. Uber Technologies Inc UBER recently announced it would introduce grocery delivery as it aims to be the Amazon of transportation, so Zoox makes Amazon able to compete in the autonomous vehicle race. Additionally, the company made a $700 million investment to buy 100,000 electric vans from Rivian to support its logistics business in a sustainable manner. 

When you factor in Amazon's recent M&A activity and past track record of success, there's reason to believe that this could be the company's most innovative decade yet. 

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