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CNBC’s Jim Cramer said on Tuesday that he no longer viewed e-commerce giant Amazon as a so-called “death star” capable of flouting big box retailers in categories ranging from drugstores to electronics.
“The days of Amazon’s Death Star are over,” said the host of “Mad Money”. “Other physical retailers have their force fields and they send the projectiles from Amazon straight back to the once invincible digital retailer. I still love the business and the stock, but that doesn’t mess up the entire industry anymore because it used to.”
Cramer said belief in Amazon’s ability to enter any industry and quickly gain an edge over incumbents has gradually weakened, in part due to innovations and improvements such as CVS. Health, Target and Walmart.
“But if there was any doubt about the end of Amazon’s Death Star status,” Best Buy ended it with its earnings report on Tuesday, Cramer said. “This is the most miraculous turnaround story in retail right now.”
Best Buy shares climbed more than 8% on Tuesday as Wall Street applauded the company’s second quarter results. Sales jumped nearly 20% in the quarter to $ 11.85 billion, beating analysts’ estimates of $ 11.49 billion, according to Refinitiv. Earnings per share of $ 2.98 easily beat expectations of $ 1.85.
Cramer touted Best Buy’s membership program known as Total Tech Support, saying it has “already exceeded expectations … and it’s easy to see why.”
The membership program, which costs $ 199.99 per year, offers “unlimited support for all your technologies and devices, no matter where you purchased them,” according to the Best Buy website.
“You probably have an IT department to help you with work in the central office, but what do you have at home? You have nothing to say … which is a problem now that so many people are working from home. “Cramer said. . “Best Buy is essentially replacing corporate technical support for remote workers.”
Previously, Best Buy was seen as “just a showroom for Amazon,” but the company, led by CEO Corie Barry, continues to innovate and thrive, Cramer said. Even though Best Buy shares have risen nearly 22% year-to-date, Cramer said “this stock has more wiggle room.”
“Until this quarter, however, I have always been concerned, with the exception of Walmart and Costco, that Amazon could fail any of these businesses at any time,” Cramer added. “Instead, the former death star is now playing with brick and mortar, presumably just to learn what his competition already knows.”
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