In a market that has plenty to worry about, whether it be the Senate health care bill, retail’s demise, or impending deflation, Jim Cramer says it is preoccupied by one thing only: Amazon.
“I think the undercurrent, or I should say the undertow, of Amazon, is such a dominant threat to so many consumer-related sectors in a consumer-driven economy that it’s sinking whole swaths of stock once again,” the “Mad Money” host said.
Cramer said analysts and companies alike are waking up to Amazon’s far reach, from its Web Services platform to its consumer-oriented online interface.
“Something’s happening now. Something … no one seems to be noticing, and that’s the characterization seeping in that Amazon, loved by consumers, might end up being viewed as the evil empire,” Cramer said.
Since the e-commerce giant announced its bid for high-end grocer Whole Foods and its new Prime Wardrobe offering, which will let customers try clothes on before purchasing them, that characterization has grown to a full backlash.
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It started with Wal-Mart, the country’s largest grocer and Amazon’s leading competitor, which stared asking its clients not to use Amazon Web Services.
“It wants them to switch to other web services, namely Alphabet, … Microsoft’s Azure, which is very hot, or even IBM. Wal-Mart’s too big a customer to say no to and it’s not that hard to switch,” Cramer said.
A Wal-Mart spokesperson responded to Cramer’s analysis, telling CNBC that Wal-Mart’s vendors have a choice as to the cloud platform they choose to host their operations.
“But, with time, we would prefer for our clients’ information not to be sitting on a competitor’s platform,” the representative said.
Oracle seemed to join the opposition in its post-earnings conference call, where management touted better cloud offerings than Amazon. Oracle’s chairman, Larry Ellison, has also challenged the colossus on price.
The rest of the market seems to be split between companies like Staples and Nordstrom shielding themselves from Amazon’s effects by considering going private, and companies like Nike and PVH taking advantage of Amazon’s ability to attract customers.
Cramer said TJX is a hidden winner of Amazon’s domination because it has the cash to buy excess inventory when mall-based stores shut down and sell it for prices lower than Amazon’s.
That said, the market does not seem to care, as it did not care when Home Depot’s latest quarter demonstrated its resilience to Amazon.
“Here’s the bottom line: Not everything can be crushed by Amazon and the Empire is striking back. So Amazon better not get too cocky. The force may at last be with its competitors if it does,” Cramer said.
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Source: Tech CNBC
Cramer: This market is scared of Amazon, and it's fighting back