Amazon’s next big bet is to rip a page from its AWS playbook and outwit competitors
Amazon on Monday took another step to turn its massive logistics network into a revenue-generating machine — a move that is expected to boost investor confidence in the stock and hit the shares of its rivals. Amazon unveiled what it calls Amazon Supply Chain Services (ASCS), giving businesses access to its complete logistics, distribution, fulfillment, and parcel delivery capabilities. The offering extends its third-party reach beyond its market vendors to companies across industries, including healthcare, manufacturing and retail. Among the first to sign up for ASCS are major brands, including Club name Procter & Gamble , 3M , Lands’ End, and American Eagle Outfitters, underscoring the growing appeal of Amazon’s logistics infrastructure. “It makes no sense for Amazon to do this. There is no one as good as Amazon in the supply chain,” DA Davidson Gil Luria told CNBC in an interview Monday. The framework is presented as “an extension beyond salespeople to any company that has any type of good or product or input they need to deliver.” It’s a strategy Wall Street likens to how the company’s flagship business, Amazon Web Services, evolved. Amazon originally built the cloud platform because of the need for internal use. It was later when it grew into Amazon Web Services, which was founded in March 2006. Now the largest cloud in the world, AWS reported last week that revenue growth accelerated to 28% in the first quarter to $ 37.59 billion. Monday’s move in purchases comes as confidence in Amazon’s broader business continues to build. “Amazon is the most confident Amazon I’ve ever heard,” Jim Cramer said during Monday’s Morning Call. He added, “I am proud that this is our largest position” in the Club’s portfolio. “There are many things that are still going well, including semi business, food business, and entertainment, all three are on fire,” he concluded. Amazon rose as much as 3% on Monday, hitting another intraday high above $276 per share. Shares are up 17% year to date and up 41% from a 2026 low of $196. AMZN 1Y mountain Amazon plays 1 year Even after the meeting, “This could be the beginning of Amazon,” said Jim previously on “Squawk on the Street.” “It can fly now.” Jim added, “If Amazon wants to win, it can win. It’s very powerful. It has the best supply chain in the world.” That benefit was immediately reflected in the stock market. Shares of industrial workers United Parcel Service and FedEx fell 9% and 8%, respectively, making them among the biggest laggards in the S & P 500 on Monday, and showing that Amazon is becoming a direct competitor. While it still uses UPS and FedEx, as well as the US Postal Service, to handle delivery needs, Amazon has scaled back those services significantly over the years as it expanded its network. To be sure, some experts warn that the release may begin before the company is ready to operate. “Amazon is still in the process of building a logistics network that can handle their needs close to 100%,” logistics expert Marc Wulfraat, CEO of MWPVL International, told CNBC in an email. He added that such a timeline could reach 2029 or 2030. That suggests the launch could happen sooner. While he supports the effort, Luria at DA Davidson also points to the risk of execution, noting that running the supply chain internally is different from offering it as a service to external customers. Amazon can rely on its experience. The company has spent nearly three decades building its logistics network – from air, land, and sea freight to fulfillment centers processing millions of orders every day to a last-mile delivery system that operates seven days a week. Until now, much of that infrastructure has been used in-house or through its own marketplace vendor fulfillment services. ASCS represents a broader push to monetize that network abroad. Given Amazon’s large scale, with revenue expected to reach more than $800 billion this year, Luria cautioned that the opportunity is currently more likely to grow than transform. “There is no market big enough to make a big difference to Amazon,” said a DA Davidson analyst, adding that the business is unlikely to sustain single-digit percentage growth in the coming years. One of the biggest hallmarks of Amazon’s capabilities is who signs up. “It tells you how good they are,” Luria. “IP&G has been managing the supply chain for over 100 years, yet they decided Amazon could do it better than them.” From a financial perspective, the new entity is expected to fall somewhere between Amazon’s low-end retail business and AWS’s high-end unit, according to Luria. Some analysts, including Helen Wang at Phillip Securities, agreed that the strategy reflected AWS’s mindset. “What Amazon is doing is essentially turning its logistics network from an internal cost center to an external revenue-generating service,” Wang wrote in an email to CNBC. He described it as “AWS-like strategy, instead of AWS-economics,” noting that logistics is a low-level business. Importantly Sticking to the monetization piece, it’s clear that investors, including us at Investing Club, want to see Amazon find ways to use its massive infrastructure to generate new revenue streams. “This news confirms that the future we are hearing is related to robotics,” said portfolio analyst Zev Fima. “As the Street rewards fully integrated cloud companies, such as Alphabet and Amazon, for their ability to monetize capex by renting excess computing capacity to third parties, this should provide that same logic to ensure that any excess capacity we see in the future can be quickly monetized.” Alongside the Q1 results, Amazon left its full-year cash flow guidance at $200 billion. Although unchanged from its previous outlook, that number was the highest among hyperscaler guidelines. Alphabet rose to $180 billion to $190 billion, with Microsoft coming in at around $190 billion. The more ways Amazon has to make money at scale, the stronger the case that its big spend could translate into strong growth tomorrow. (Jim Cramer’s Charitable Trust is long AMZN, PG. See here for a full list of stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you’ll receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling stock in his charity portfolio. When Jim talks about a stock on CNBC TV, he waits 72 hours after issuing a trade warning before making a trade. THE PRIVATE INFORMATION OF THE BURNING CLUB IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, AND OUR PRIVACY POLICY. NO LEGAL LIABILITY OR OBLIGATION EXISTS, OR IS CREATED, BY YOUR ACCEPTANCE OF ANY INFORMATION PROVIDED BY CONTACTING THE INVESTMENT CLUB. NO PARTICULAR RESULT OR INTEREST IS GUARANTEED.
