Amazon Is Changing the Delivery Landscape... Again

The e-commerce landscape has changed drastically in recent years.

Years ago, you had to wait weeks to receive anything you ordered online.

But then an online bookstore came along that changed the world's expectations for delivery standards. It forced companies to completely rethink their logistics networks.

Of course, I'm talking about Amazon (AMZN).

Its two-day delivery promise that came standard with its Prime membership was groundbreaking. And now, it's making another big push to establish even newer delivery standards.

These efforts are paying off in a big way...

Headline No. 1:

Amazon reached a major milestone with same- and next-day delivery.

McCall's Call: This morning, the e-commerce behemoth said that so far this year, it has delivered 1.8 billion packages to U.S. Prime members on either the day the items were ordered or one day later. That's up nearly 4X from 2019.

The company also said that it achieved its "fastest Prime speeds ever" last quarter.

This is a remarkable accomplishment. Today, we can order something in the morning and get it that night. Amazon Prime was first established in 2005. So what's even more impressive is that Amazon has been able to achieve this in just 18 years.

I often say that innovation doesn't sleep. Companies are always working on big and revolutionary projects. And this is more proof of that idea.

Consider how much of a leg up that Amazon has, thanks to its logistics network. It's a massive competitive advantage that would be difficult and very expensive to recreate. And that means it's worth much more than its build-out costs.

It's also worth noting that Amazon has been using machine-learning technology to improve its inventory management. The company can assess where its goods are located and move them to different warehouses to speed up delivery times. According to the firm, across the top 60 U.S. metro areas, it now delivers more than half of its Prime orders with same- or next-day delivery.

And now, it's going to double the number of "same-day sites" – warehouse locations specifically built for same-day delivery – over the next two years.

So in less than two decades, there has been a huge shift in the logistics and transportation industry – and it's mostly thanks to Amazon. It used to take weeks to get an online order. Now, you can practically have it in your hands in a matter of hours.

We've come a long way in a relatively short amount of time. So just imagine what other innovations will be the "norm" 20 years from now.

Headline No. 2:

Many companies are doubling down on artificial intelligence ("AI") this earnings season.

McCall's Call: AI remains at the forefront of investors' minds. According to data from Google Trends, folks are still searching for "AI" more than they have at any other time since the data started being collected in 2004.

And this earnings season, Big Tech companies are taking advantage of that.

AI-related stocks like Nvidia (NVDA), Meta Platforms (META), and Microsoft (MSFT) have all posted big gains so far in 2023, thanks to their AI tech.

And according to Reuters, more than 30% of companies in the S&P 500 Index have mentioned AI on their analyst calls this quarter. That's up from just above 20% in the first quarter and nearly double the number of companies that mentioned AI a year ago.

What's more, the average S&P 500 earnings call now has nearly four mentions of AI – double the mentions from the first quarter. Prior to the fourth quarter of 2022, companies weren't even averaging one AI mention on their quarterly calls.

Now, some of these references could be companies trying to capitalize on the AI frenzy and boost their own stocks. We've seen that happen before during the dot-com bubble and the more recent crypto craze.

But the companies talking about AI the most are the ones that will actually make sure this technology is here to stay...

Take Alphabet (GOOGL) and Microsoft, for example. These two firms had some of the most mentions of AI. And they're the same ones working on the most consumer-facing AI applications right now – like AI-powered search engines.

Even chipmaker Intel (INTC) and computing-software firm Cadence Design Systems (CDNS) – two companies that are crucial to the AI megatrend – had some of the top AI mentions.

There's no question that the AI trend is picking up steam. That's why my team and I are building out our own AI watch list. And you can bet we're keeping an eye on what companies are saying on their earnings calls.

While sentiment in the space is a little frothy today and many AI-related stocks have run up a lot, it's clear that this technology is here to stay. In fact, I believe AI will be one of the single most impactful megatrends of the Roaring 2020s.

And that makes now the ideal time to start gaining exposure to it in your portfolio.

Here's to the future,

Matt McCall
Editor, Daily Insight
July 31, 2023

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Did You Miss My Latest Podcast?

The Federal Reserve ended its brief "pause" last Wednesday and raised interest rates by 25 basis points (0.25%). This came as no surprise to investors. But the action in stocks told us a lot. This episode of Making Money With Matt McCall is all about the Fed. And Paul Schatz – the founder and president of Heritage Capital – joins me for a second time to discuss what's next for the central bank and the stock market.

Paul and I talk about what we believe the Fed's real goal is for raising rates and what you can expect from the next meeting. And we even break down how it will impact your portfolio. Plus, we take a look at the latest action in the Dow Jones Industrial Average. And Paul shares some of the sectors he likes right now. Tune in for all the details.