Today Amazon (AMZN) closed at $1,006.73/share, the first time it has ever closed over $1000. Year-to-date this stock has been a heater returning just over 33%. Take a look at it’s 2017 monthly returns, witness it decimating the returns of the S&P and even the Nasdaq:
What is the catalyst for the rapid rise? Is it Amazon web services? Is it ownership of sites like Woot and Twitch? Is it the expansion of Amazon video or Amazon Prime? Maybe Amazon Echo? Is it Zappos? Or maybe its just Amazon’s continued supreme dominance in online retail which is evidenced by so many brick and mortar businesses closing down or reducing in size. I believe all of those factors contribute, but the primary factor in my opinion is that so much of commerce has moved online – the internet is a new way of life.
According to Slice Intelligence Amazon accounted for 43% of US online revenue in 2016 and 53% of all US online sales growth. That is monopoly like dominance. Most of the time Amazon is the first place you check when you need to buy something online. That is an advantage that no other online retailer enjoys, an advantage that I foresee won’t be ending any time soon.
Fortunately I own a few shares of Amazon, I entered the position in early February around $817/share. I’ve clocked in a 23% gain so far making Amazon the best performing stock in my portfolio this year. I also have exposure to Amazon through my 401k and IRA through ETFs and mutual funds. I own the Nasdaq index ETF QQQ which currently has almost 7% of its portfolio in Amazon and a Large Cap Stock Fund (FUSVX) which has approx. 1.72% of its holdings in the stock. Sad to say together AMZN makes up less than 1% of my retirement portfolio.