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Muhammad Bazil
Muhammad Bazil
Articles (192) 

Amazon Is the Tech Stock to Buy

July 19, 2012 | About:

While a large percentage of the tech market is hardwired to believe that the only good buys are Google (NASDAQ:GOOG) and Apple (NASDAQ:AAPL), a lot of investors overlook Amazon (NASDAQ:AMZN). Perhaps it’s the endless skeptic spirit rallied by bears. All the same, numbers don’t lie. Amazon’s shares have swelled more than 25% since the onset of this year.

The prevailing circumstances, at the moment, give Amazon a definite edge against other tech stocks. For starters: its investment cuts across a wide platform and as such gives the e-commerce giant a chance to spread its risks. This is especially so after it made a notable entrance into the tablet niche.

Now that I have mentioned tablets, it would be in order to shed light on how these fancy gadgets will make Amazon a lot of money:

The Kindle

Retailing at just $199, the Kindle has become a household name. It has managed to pierce through the one indomitable force that sends chills down the spines of many tech players. The one force that is even forecasted to hit the 1 trillion mark at a near point in future – Apple.

There is some real daylight between Kindle’s pricing and iPad’s pricing. Kindle is more affordable and as such, casts its nest over a large share of the market. As if this is not enough, Kindle’s service package appeals to a wide range of consumers. This is predominantly so because it provides a direct gateway to Amazon which is by and large the biggest online retailer.

One of the notable indications that Apple is indeed feeling the pressure is its recent standpoint on price. Apple has a new iPad in the pipeline. Interestingly, Apple is scaling down on device size and device price. I believe that this move has been triggered by the need to compete more aggressively. While Apple has a big market share in the iPhone market, prospects are not as high as in the tablet market. It therefore has to go to extreme lengths to ensure that tablets like the Kindle do not burn through its market.

Interestingly, while Apple is focusing on reducing size, the already popular Kindle is geared for an increase in size. This is bound to generate a few ripples and Apple will be out to lose.

Still on tablets. I believe that Microsoft’s surface poses no threat to the Kindle. Microsoft has good products. It however made one fatal error when it chose to lag behind amid fast changing technological breakthroughs. This mistake has demonstrated its costly price on several occasions. While the surface may still have a shred of hope, previous attempts by Microsoft to filter through the smartphone industry have bit the dust.

As of now, the only real threat to the Kindle is Google’s Nexus, which, by the way, is very competitively priced compared to the iPad. Fortunately, for the Kindle, it has managed to anchor its popularity into the very hearts of consumers.

The cloud avails new prospects

The cloud has also aroused new prospects over at Amazon. Rumor has it that Amazon’s cloud will now incorporate a standout game platform. This new platform, called the GameCircle, presents a lot of interesting possibilities.

In as much as the GameCircle exhibits strikingly similar lineaments with Apple’s Game Center, it has some distinct disparities that arguably give it a definite edge. The GameCircle allows users to directly sync saved games over Amazon’s cloud service. Amazon also plans to launch a new e-commerce distribution system called Game Connect. This system will allow users to easily discover and narrow down to interesting free-to-play PC games. In addition to that, the system will give Amazon a chance to expand its service package. Amazon will be able to handle some of the back-end functionalities for developers.

Speculators are also brimming with expectations, especially so after news of the new game platform hit the headlines. Apparently, Game Circle extends the option to switch between various Kindle Fire devices. This has led to speculators (me included) to believe that Amazon will launch a series of Kindles, brightening the future.

I am insistent on my initial inclination. Amazon exhibits strong fundamentals, has dependable products and a laudable market share. It is a definite buy.

About the author:

Muhammad Bazil
Muhammad Bazil is a financial journalist and editor for a variety of websites, public policy organizations, and book publishers. He has written hundreds of published articles and blog posts on topics including budgeting, credit management, real estate and investing. His articles have been featured on the homepage of Yahoo!, MSN and numerous local news websites.

Rating: 2.3/5 (32 votes)


Dr. Paul Price
Dr. Paul Price - 5 years ago    Report SPAM

You said not one word about what AMZN is 'worth' and why.
Blogging About Money
Blogging About Money - 5 years ago    Report SPAM

"Speculators are also brimming with expectations, especially so after news of the new game platform hit the headlines. Apparently, Game Circle extends the option to switch between various Kindle Fire devices. This has led to speculators (me included) to believe that Amazon will launch a series of Kindles, brightening the future."

I don't believe the gurus listed speculate. This isn't an investment recommendation. Sorry, I got nothing out of this article to support an investment thesis.
Ramboris - 5 years ago    Report SPAM

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