Why Amazon’s Stock Soared on Wednesday

Shares Amazon (AMZN 2.90%) Shares were up 3.4% on Wednesday. As of 12:46 p.m. ET, shares were up 2.7%.

The catalyst that propelled the e-commerce giant to the top was a report that Amazon was expanding its already robust one- and two-day shipping options to underserved parts of the U.S.

Strengthening your advantage

According to a report in the magazine, Amazon is working to expand its delivery empire into the most rural areas of the United States to boost sales in less densely populated areas. Wall Street JournalIn recent months, the company has been working to optimize its delivery and logistics services to reach a larger percentage of the population faster, especially in remote locations.

To better serve rural customers, Amazon will change its practices, “using hyper-efficient warehouses, contract drivers, and small shops,” according to the report. The company is seeing growing demand in more remote areas and believes that by speeding up its delivery service, it can further increase that demand.

It’s simply not practical to reach 100% of the country, but Amazon is now trying to reach about 90% of its U.S. customers. In a statement, the company said these efforts “will help reduce delivery times for customers in smaller towns and more isolated parts of the country.”

Increasing your advantage

When it comes to digital commerce, Amazon is unrivaled, accounting for about 38% of U.S. online retail sales last year. That’s more than the next 15 biggest rivals combined, according to data from eMarketer.

Amazon is not only the leader in e-commerce, but also the leader in cloud computing, controlling about 31% of the market in the first quarter, according to research firm Canalys. This cloud dominance also gives Amazon a key advantage in the generative artificial intelligence (AI) revolution as a provider of cloud-based AI software and solutions. It’s worth noting that AI stocks are also rising, which likely helped fuel Amazon’s rise today.

Finally, at less than 3x sales, Amazon is attractively valued, especially considering the many ways the company can grow. That’s why Amazon stock is worth buying.