Amazon ($AMZN) – Pharmacy, AI, a Sell Side Darling etc. – June 22, 2024
RxPass is now available for Prime Members with Medicare. This allows 50 million more consumers to access 60 common prescriptions, with fast and free delivery all for $5 per month. Whether it’s this development, Prime Video investments, Project Kuiper, grocery delivery, music streaming etc., the world-class Prime subscription keeps getting… well… more world-class. There’s a reason why so many other companies are trying to emulate the value of this subscription in their own sectors to improve revenue quality and overall retention. More utility is what creates the justification to flex pricing power and still enjoy very low churn. That’s what Amazon Prime does, and this announcement is simply one more compelling product within a sea of value creation.
In other potential up-selling and retention-juicing news, Amazon is gearing up to debut Alexa AI this summer. This, as with Apple’s Siri, should greatly bolster the actionable use cases that can be conversationally queried/activated. It could easily be used to perfect product discovery and to support its thriving e-commerce marketplace. I’m sure there are many more plans for it than I can’t even fathom. There will be a basic version of this product and a premium version costing $5-$10 per month.
- More sell-siders are lining up to offer bullish notes on Amazon. This week, it was JP Morgan and Goldman Sachs. JP Morgan sees retail EBIT margin expansion continuing (maybe they read the newsletter). Goldman sees strong e-commerce growth through 2028 and Amazon effectively capturing that growth.
- Amazon continues to earmark billions for future infrastructure investments across the globe. This week, announcements included a 10 billion Euro investment in German cloud capacity.
