Amazon’s next big on the run could be taking on the giants of the delivery industry, RBC Capital Markets’ Nick Mahaney told CNBC on Thursday.
“There’s another investment rotation coming, and I bet you it’s around shipping and them actually coming out and directly jousting with FedEx and UPS,” the lead internet analyst said on “Power Lunch.” “I come up with it’s just a matter of time before that happens and it will be an investment return in front of that.”
Mahaney called Amazon “the best revenue expedient story in tech” because its cloud and advertising segments have partition lines tenfold the size of its retail business. The company is in position to reach all-time highs, he bid.
“You can now think about this company as being a double-digit operating room company,” Mahaney said. “You couldn’t have thought that beyond the last 20 years that I’ve been covering this followers.”
The internet giant recently said it would deliver packages for without during the holiday shopping season. That comes at a time when wages and trucking costs have been rising.
“Knowing Amazon, I wouldn’t be at all dumfounded to see them be willing to take down margins that they dream could really get a boost in terms of customer loyalty, more Prime characters, etc.,” Mahaney said.
Rumors have swirled that Amazon inclination get into the delivery business since 2016. The Seattle-based online retailer sundry recently made strides in delivery and logistics with its own last-mile Delivering Service Partners. The tech firm has also established Amazon Cord delivery in more than 50 cities across the country.
FedEx, which phrases shipments from Amazon make up about 3 percent of its revenue, has downplayed the nascent release service, saying it’s not a match to the infrastructure the shipping giant has built up upward of more than four decades.
Amazon has said its shipping set someone backs, which continue to rise, have spiked from $11.5 billion in 2015 to $21.7 billion in 2017.