Amazon.com, Inc. (NASDAQ:AMZN) dominance on payment systems, entertainment scenery, logistics and cloud computing is quietly coming under threat from the fast growing, Chinese heavyweight Alibaba Group Holding Ltd (NYSE:BABA). Amazon has over the years resorted to reinvesting whatever income it gets from existing operations to other business lines that it hopes could spur growth in the long-run.
Amazon has already tapped into the one-touch payment business. It is a big player on the cloud computing landscape and also giving the likes of Netflix, Inc. (NASDAQ:NFLX) a run for their money on content delivery. The diversification of business lines has over the years affected the company’s profit margins. Investors have, on the other hand, opted to remain silent believing CEO, Jeff Bezos game plan to be the best suited for the company’s long-term prospects.
Investors’ concerns about Amazon’s long-term prospects could be slowly reaching fever pitch. Alibaba Group Holding Ltd (NYSE:BABA) enjoys exposure to almost all Amazon’s business operations with an advantage of being backed by one of the largest marketplaces in the world. Unlike Amazon, Alibaba is profitable and growing to the liking of many investors.
On the filing of the IPO requirements, Alibaba reported that its revenue for the fiscal year ending March had grown by 52%, to highs of $8.6 billion with a net income of $2.5 billion. Amazon, on the other hand, registered net sales growth of 20% in the last quarter as the company continues to face stiff competition. Alibaba Group Holding Ltd (NYSE:BABA) continues to soar in the market as investors remain confident that the company will post impressive earnings on November 4th, unlike Amazon.
Alibaba Group Holding Ltd (NYSE:BABA) has the advantage of being the biggest player on e-commerce in China where it operates under minimal competition. The company is bolstering its mobile play while also increasing its stakes on Alipay that is a lookalike in terms of its core business operation to PayPal. Alibaba is reportedly planning to acquire stakes on Lions gate while maintaining a close eye on the entertainment scenery.
Amazon investors have stuck with the company over the years on disappointing earnings. It waits to be seen if investors will maintain their loyalty on Amazon.com, Inc. (NASDAQ:AMZN) or jump ship to Alibaba Group Holding Ltd (NYSE:BABA).
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