Can Amazon's Logistics Expansion Further Boost Online Stores' Growth?

Core Insights - Amazon is enhancing its delivery and logistics operations to improve customer experience and support e-commerce sales [1] - The company is investing over $4 billion to expand its delivery network, aiming to triple its size by 2026 [2] - Amazon's Online Stores segment generated $57.4 billion in revenues in Q1 2025, reflecting a 5% year-over-year increase [4] Delivery and Logistics Expansion - Amazon plans to expand Same-Day and Next-Day Delivery to tens of millions of U.S. customers in over 4,000 smaller cities and rural areas by the end of 2025 [2] - As of June 2025, the number of items delivered the same or next day in the U.S. increased by more than 30% year over year [3] - The expansion of the delivery network is expected to further increase the volume of ultra-fast deliveries [3] Financial Performance - The Online Stores segment accounted for 36.9% of Amazon's total quarterly revenues in Q1 2025 [4] - The revenue estimate for Online Stores in 2025 is projected at $263.8 billion, indicating a 6.8% growth year over year [4] Competitive Landscape - Amazon faces significant competition in the e-commerce logistics space from companies like Target and Walmart [5][6] - Target's acquisition of Shipt for same-day delivery poses a serious threat to Amazon's market position [5] - Walmart is enhancing its e-commerce capabilities and delivery services, which strengthens its competitive edge [6] Stock Performance and Valuation - Amazon's shares have declined by 3.3% year-to-date, underperforming the Zacks Internet-Commerce industry and the Retail-Wholesale sector [7] - The stock is currently trading at a forward Price/Sales ratio of 3.10X, compared to the industry's 2.01X [11] - The Zacks Consensus Estimate for Q2 2025 earnings is $1.31 per share, indicating a 6.5% year-over-year growth [13]