Amazon... The Power of Prime?

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Oct. 25 (Bloomberg) -- Topeka Capital Markets' Victor Anthony and Bloomberg's Jon Erlichman discuss the outlook for Amazon with Trish Regan on Bloomberg Television's "Street Smart." (Source: Bloomberg)

Amazon is looking incredible today.

The world's largest online retailer blew away analysts.

Jeff bezos has been on a spending spree to keep customers happy, pouring money into the cloud computing service.

Building warehouses closer to customers to curb shipping costs, and unveiling the company's third generation of kindle fire tablets, trying to continue to separate its self in an increasingly crowded tablet space.

Is now the time to add amazon?

Jon, one headline from amazon's numbers is that it added millions of crime users in the past three months.

How important -- prime users in the past three months.

How important is that?

It is a nice nugget, for sure.

People jumped on the cfo and said, how many millions?

The people who use amazon prime, there are a lot, pay $79 for the year and get today free shipping.

-- two-day free shipping.

Here in hollywood you hear about amazon doing its own shows.

It is making those available to the people who use amazon prime.

Amazon tries to build a moat around its business through prime to keep you spending.

On that spending story, themes such as the sales guidance amazon gave us for the end of the year made people feel pretty good.

Not a lot of profit.

But the fact that they are ready to bring in a lot of bacon for the holiday season -- i guess the idea that if you pay the $79, you will be guaranteed two-day shipping incentivizes you to keep going back to amazon.

Victor anthony, you up to your price target to what?

$405 per year in 2014. what is fueling your optimism?

I look at amazon as a must- owned stock.

Amazon is taking the lion's share.

They are building an online advertising system.

They are really killing it with the ash -- awf.

Then you have the kindle devices.

Prime is one part of the strategy.

What you see in amazon is investment in growth.

The guidance for the fourth order is strong.

Any worries that this company is getting too big?


What they're doing is incredibly costly.

One number that amazed me is amazon now has more than 109,000 employees.

Some of them are part-time workers.

At this time last year, they had 80,000. the workforce is exploding.

All these fulfillment centers, they are very costly to run.

Critics will always say if this company cannot show at some point a strong ability to make money, all it is is a spending machine.

Certainly after the stocks had a run-up like this, some people will have a hard time knowing, should i be buying the stock at $400? chris, what do you see in charts?

This is a trend that you stick with.

It has been the most consistent trend in the market since 2009. today's breakout carries higher.

That is now new support.

Any pullbacks into that area, we want to be a buyer.

It is relevant that seasonality for retail right now is generally a tailwind.

We think trend is in the chart favor, and we're not afraid of momentum in the fourth quarter.

Thanks so much here .

This text has been automatically generated. It may not be 100% accurate.


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