Is Amazon.com, Inc. (NASDAQ:AMZN) the next Apple Inc. (NASDAQ:AAPL) or the next Dell Inc. (NASDAQ:DELL)? Forbes contributor Igor Greenwald makes a case for Amazon to become the next Dell, which may be hard for some investors to fathom, given the stock’s three-digit per share price. Right now there is a lot of talk about which company will be the next Apple, and the bottom line is that we’re simply seeing a massive shift happen in the tech world right now.
How Consumers See
Of course Amazon.com, Inc. (NASDAQ:AMZN) is a retailer, while Apple Inc. (NASDAQ:AAPL) is a consumer products company. If you want to buy something, you go to Amazon, but if you want a consumer electronics product like a smartphone or a tablet, you go to Apple. Of course you might still go to Amazon to buy your Apple product.
ValueWalk's Raul Panganiban interviews Kirk Du Plessis, Founder and CEO of Option Alpha, and discuss Option Alpha and his general approach to investing. Q1 2021 hedge fund letters, conferences and more The following is a computer generated transcript and may contain some errors. Interview with Option Alpha's Kirk Du Plessis
Now let’s throw Dell Inc. (NASDAQ:DELL) into the mix. Dell’s computers have been around for a while, and they currently run on Windows software made by Microsoft Corporation (NASDAQ:MSFT). So if you wanted a Windows computer, you might have (in the past) bought one from Dell.
How Investors See
From an investor standpoint, Apple Inc. (NASDAQ:AAPL)’s fall from glory in just a few months could have you looking elsewhere for your shiny penny. You may even be starting to wonder if Apple is now where Dell was a few years ago when it started to fall. Apple shares have made no ground in a year despite peaking a few months ago. The losses in recent months have erased all of the gains Apple Inc. (NASDAQ:AAPL)shares made in the past year.
So is Amazon.com, Inc. (NASDAQ:AMZN) your next shiny penny? Or is it destined to become the next Dell Inc. (NASDAQ:DELL)? And where does Microsoft, the king of business software, fit into this rapidly changing picture?
Amazon = Dell or Apple?
As Greenwald makes his case about Amazon becoming the next Dell, he said Amazon has $61 billion in annual revenue and about 15 percent of online sales in the U.S. He equates that with Dell in 2003. However Amazon is more like Apple Inc. (NASDAQ:AAPL) in 2003 because of how high the multiple is on its shares. Amazon has a lot of great cheerleaders right now, singing its praises — much as Apple has had in the past.
But what investors want to know when making long term investment decisions is where the company is going to go next. Some have made the argument that Apple’s time is done. Apple Inc. (NASDAQ:AAPL) just doesn’t have the “it” factor that it did when Steve Jobs was around. What is there left for Apple Inc. (NASDAQ:AAPL) to do?
Where To Next?
If you really think about it, you could be asking the same thing about Amazon.com, Inc. (NASDAQ:AMZN) right now. Where can it go next? It has already shut down most brick and mortar bookstores and now is taking on electronics stores. But what happens when we run out of brick and mortar businesses for Amazon to put out of business? The company is making a foray into video streaming, but that’s not going so well. The real question is going to be when will Amazon’s bubble pop. It certainly seems as if Apple’s bubble has popped.
What About Microsoft?
Meanwhile Microsoft Corporation (NASDAQ:MSFT) is looking to step into Apple Inc. (NASDAQ:AAPL)’s place. Aside from the shiny new Microsoft store that looks and feels just like an Apple store, the company also took steps to keep Dell loyal so that it won’t start looking to Apple for crumbs. Microsoft Corporation has made a $2 billion loan to help Dell go private under the ownership of its founder, chairman and CEO, Michael Dell.
That little loan could go a long way toward keeping Dell loyal to Microsoft, while also giving Microsoft a hand in the hardware field. Microsoft is rapidly encroaching upon Apple’s turf, first with the Windows 8 smartphones and then with the Microsoft store and now this loan.
So will Dell Inc. (NASDAQ:DELL) have a second act? Who knows? Microsoft certainly seems to be preparing for that possibility.
Will Apple Inc. (NASDAQ:AAPL) have a second act? Again, who knows?
And what about Amazon? How much further up can it go before it begins to deflate? We’ll have to just wait and see and, if you’re an investor, hope that you make the right guess in the meantime.