Amazon Stock Approaches Record High as Bezos Goes on Epic Hiring Spree
Jeff Bezos has built an empire that's thriving during the darkest days of our generation. That's probably why AMZN shares are back near record highs despite a broader market slump. | Image: REUTERS/Joshua Roberts/File Photo
- Amazon stock is within a whisker of its all time highs at $2,171.44.
- In an incredible show of dominance, Jeff Bezos is hiring an additional 75,000 workers on top of the 100,000-plus workers already committed. He’s also spending $500 million on pay raises.
- It’s no wonder AMZN stock has proven to be a haven for Wall Street during this year’s stock market crash.
Amazon (NASDAQ:AMZN) stock is within a whisker of its all-time highs, and it isn’t hard to see why. Delivery services are booming amid the coronavirus lockdown, but it’s the ample supply of freshly unemployed workers that makes billionaire Jeff Bezos’ company so impervious to the slowdown.
Amazon Stock Shines Amid Coronavirus Crisis
With the stock market seeing wild volatility this year, the tech sector has continued to roll — sending the Nasdaq lower by about 5% year-to-date. Amazon has been one of the main pillars propping up the index, and it isn’t hard to see why.
With most of America at home under shelter-in-place orders, Amazon’s online delivery services have become an integral part of everyday life, especially for the old or at-risk individuals.
It’s Bezos’ risky gambit into the grocery store market that has emerged as the greatest success, as Amazon Fresh for Prime members has seen a huge spike in orders .
Bezos Gifted Incredible Supply of Desperate Job-Seekers
Dramatic demand alone would not have been enough to keep Bezos in his comfortable spot as the world’s richest man .
Dow 30 member 3M (NYSE: MMM) has seen an incredible surge in orders for its N95 respirator masks and yet its stock is still well of its yearly highs. This is principally because it has not been able to increase its supply sufficiently to match the order volume coming in .
Amazon has no such problem.
A wave of unemployment has seen more than 16 million Americans file jobless claims in three weeks. This leaves Bezos with the best possible environment to scale his operation. A tight labor market is no longer an obstacle for Amazon, which already pays $15 an hour minimum wage in the U.S.
On Monday, the delivery giant announced it would be hiring an additional 75,000 workers to go with the 100,000-plus it already brought on board. The following is an excerpt from a blog post on the company’s website :
We know many people have been economically impacted as jobs in areas like hospitality, restaurants, and travel are lost or furloughed as part of this crisis, and we welcome anyone out of work to join us at Amazon until things return to normal and their past employer is able to bring them back.
Despite strong deflationary forces , Bezos is even increasing wages for workers. At a time when companies are slashing compensation , Amazon is planning half a billion dollars worth of raises for its workforce:
We also continue to invest in pay increases and previously expected to spend $350 million to increase wages during this unprecedented time—we now expect that to be over $500 million.
AMZN Dominance Explodes as Grocery Business Roars
It’s therefore no surprise that Amazon is close to all-time highs. The delivery business that Bezos pioneered has emerged as systemically essential to the western world during a crisis.
Some consumers may never return to grocery stores as analysts forecast that Amazon could triple its revenue by 2023.
Perhaps the only worry for Amazon stock is a weakened U.S. consumer. Spending is likely to fall, and Bezos cannot possibly hire everyone.
For now, money spent on groceries has actually increased while every other metric has fallen under COVID-19.
Still, it isn’t hard to see why investors fleeing equities would park capital in AMZN; by all accounts, the coronavirus has fast-forwarded its path to complete dominance.
