How Amazon Is Becoming Walmart – InvestorPlace

How Amazon Is Becoming Walmart – InvestorPlace

Amazon (NASDAQ:AMZN) is in the process of becoming Walmart (NYSE:WMT). But no one interested in AMZN stock is asking whether it should.

Here's Why 2020 Won’t End Like 1999’s Partying in Amazon Stock

Source: Mike Mareen /

The “whisper number” on Amazon’s December quarter sales is $112.5 billion. That’s still almost $20 billion short of what Walmart should do for the quarter ending in October. But it’s getting closer, fast.

Almost $53 billion of Amazon revenue in the September quarter came from product sales. That’s a growth rate of 33%. It’s well over one-third of Walmart’s $137 billion in third quarter revenue.

Here’s a heretical question. Is this a good thing?

Investing Cash Flow

As I have written here many times the secret to Amazon is cash flow.

While other companies use their cash flow to buy back stock or pay dividends, Amazon plows its cash flow back into the business. Even in its stellar third quarter report, less than 7% of Amazon revenue hit the net income line.

Amazon had $12 billion in operating cash flow during its most recent quarter. It invested $11 billion in property and equipment. Much of that went to Amazon Transportation Services, the company’s logistics branch. It has a fleet of 80 jets, 30,000 tractor-trailers, and 69 package sorting centers. About two-thirds of its “middle mile” deliveries,