uploads/2020/04/amazon-bezos-investors.jpg

5 Things Jeff Bezos Wants Amazon Stock Investors to Know

By

Updated

Every year, Amazon (NASDAQ:AMZN) CEO Jeff Bezos pens a letter to Amazon investors. Usually, the letter highlights Amazon’s achievements and outlines the plans to make the company better.

This year’s letter came at a time when Amazon and the world at large face the COVID-19 pandemic. The outbreak has produced opportunities and challenges for the company. Here are the five things Bezos would want Amazon stock investors to know right now.

Article continues below advertisement

Amazon stock soars amid demand for online shopping service

The company’s employees are working around the clock to ensure that necessary supplies are delivered to customers’ doorsteps. COVID-19 has created a huge demand for online shopping, Bezos said in the letter. The company has been adding more workers to help it meet the demand. Recently, Amazon hired 100,000 warehouse and delivery workers. The company will hire an additional 75,000 people for warehouse and delivery jobs.

In fact, Amazon teamed up with Lyft (NASDAQ:LYFT) to help it fill open jobs faster. Lyft recommended that its drivers work for the company.

Amid the increased demand for online shopping, Amazon is waging a war on sellers trying to exploit consumers amid the pandemic. The company suspended thousands of sellers and removed over half a million listings for violating its rules that prohibit price gouging.

Increased online shopping demand has drawn more investors to Amazon stock. Notably, the stock rose 4.36% on Thursday and closed at $2,408. Lately, the stock has been hitting record highs.

Focus on staff safety

Bezos said that Amazon has taken several steps to ensure the health and well-being of its staff during the pandemic. For example, the company has distributed face masks to its workers. Also, workspaces and share spaces are sanitized regularly. The company has also implemented social distancing measures at its warehouses.

Currently, Amazon is working to set up labs to provide coronavirus testing for its staff. The company hopes that tests will help curb the spread of COVID-19. Some Amazon warehouse workers have tested positive for COVID-19, which raised labor tensions at the company. The company stopped its operations in France due to a dispute about COVID-19 safety measures.

Bezos also noted that people who have lost jobs in other industries due to COVID-19 have found opportunities with Amazon. Some new workers include an airport mechanic and a teacher.

Article continues below advertisement

Wage hikes to cost Amazon over $500 million

To boost morale among Amazon’s workforce, the company hiked wages for its hourly staff. Through the end of April, the company expects the pay increase to cost it more than $500 million. While the pay increase is expensive, Bezos said that it’s the right thing to do amid the current circumstances. However, Amazon has a strong balance sheet. The company finished 2019 with $36 billion in cash reserve.

Boosting staff morale could also help Amazon make the most of the current situation. The company might increase sales and lift its stock in the process. Amazon stock has risen 18% this week. Booming online shopping has lured more investors to the stock.

Uptake of Amazon cloud services increases

Amazon’s cloud division is playing an important role amid the COVID-19 crisis. Hospitals, schools, and government agencies are using the company’s cloud services to keep important operations running during the crisis. For example, hospitals are using Amazon cloud to care for patients and explore treatments. Schools use the cloud to conduct virtual classrooms to ensure that learning continues despite COVID-19 lockdowns.

Amazon is the world’s largest cloud computing company with a 33% global market share. The cloud business is the company’s profit machine.

Amazon stock and climate change

Bezos said that Amazon will continue to reduce its impact on the environment. He revealed that the company plans to deploy 10,000 electric delivery vans by 2022. Amazon plans to expand to 100,000 electric delivery vans by 2030. The company continues to invest in renewable energy. Notably, Amazon expects its renewable energy capacity to reach 80% of its energy consumption by 2024 and 100% by 2030. Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT) and Apple also have ambitious climate change programs.

Finally, Amazon stock has recovered from the COVID-19 sell-off. So far, the stock has risen more than 20% for the year.

Advertisement

More From Market Realist