Amazon Hits Warp Speed...

Hey there Folks,

In tonight’s edition, we’ve got Walmart getting a little too cocky, Amazon taking things personally, and Qualcomm pressing the “fine, I’ll do it myself” button.

Let’s get started…

-Walmart: “Not only have we beaten Target like a red-headed-stepchild… we now have faster shipping than Amazon in most cities…”

Amazon: “And I took that personally…”

It’s true, Walmart has been on a generational run lately. But unlike Target (RIP), they’re not the type to roll over and let Jeff Bezos Andy Jassy take their lunch money without a fight.

Just hours after raising Prime Video prices for the folks who don’t want to see any more Jennifer Garner Capital One ads… Amazon (-6% YTD) is officially rolling out 1-hour and 3-hour delivery across parts of the U.S. (Finally, a move that doesn’t involve building another data center or buying more GPUs).

And you should know, this isn’t some tiny beta test buried in Boise either. Three-hour delivery is already live in more than 2,000 cities, while one-hour delivery is popping up in hundreds of areas. Over 90,000 products qualify too… meaning everything from baseball gear to cold medicine to the most random items that only a madman would have in stock. Because somehow… Jeffrey already knew you’d need it.

And yes… you’re paying for your lack of patience. Prime members get hit with $9.99 for one-hour delivery and $4.99 for three-hour. If you’re not in the Prime club, Amazon charges you a “should’ve subscribed” tax and calls it a day.

Amazon says this is all about saving customers time. Translation: Walmart’s creeping up and Amazon can hear the footsteps.

Remember, back in 2005, Amazon got everyone hooked on free two-day shipping like it was a harmless little perk. By 2019, that turned into one-day delivery. Then same-day. Now we’re here… where three hours somehow feels like a mild inconvenience and one hour feels reasonable.

And they’ve tried just about everything to get to this point. They killed off Prime Now, experimented with mall-based delivery, and are still testing faster drop-offs… while pushing drone delivery that already had one take out an internet cable in Texas last year.

And while Amazon is busy shaving minutes and seconds off delivery times like it’s training for the NFL combine, the competition isn’t asleep.

Walmart says it can already hit 95% of U.S. households in under three hours, while DoorDash, Uber Eats, and Instacart are all trying to evolve into “we deliver your entire life.”

Needless to say, Amazon better watch its back.

Oh and luckily for Andy… he’s got more to worry about than just the homefront. JD.com just announced it’s launching a European operation… with the clear goal of taking a swing at Amazon over the pond.

-Someone check on all those Reddit morons who put their entire life savings into Qualcomm during the pandemic…

Well, it indeed looks like since Qualcomm (+3%) can’t get investors to buy the dip… they’ll just do it themselves.

In a move of desperation, the smartphone chip supplier just dropped a $20 BILLION buyback program in an attempt to single-handedly resuscitate its own stock chart.

Why, you ask?

Because Qualcomm has been getting cooked this year (down 24% YTD) thanks to a global memory shortage slowing smartphone production to a crawl.

And when fewer phones get made… fewer Qualcomm chips get shoved inside them. (Crazy how that works.) Not ideal for a company whose entire personality lives inside every iPhone and Android device on Earth.

So what’s the move? You buy your own stock at a discount and call it “shareholder returns” with a straight face.

The new $20B buyback stacks on top of an existing $2.1B authorization (because apparently they weren’t done shopping), and management made it very clear this isn’t a one-time thing.

They also raised the quarterly dividend from $0.89 to $0.92… bringing the annual payout to $3.68. Translation: “We’re still printing money… please clap.”

CEO Cristiano Amon pretty much doubled down on that message, saying the company is focused on rewarding shareholders while pushing deeper into new markets.

Because here’s the real story… Qualcomm knows living and dying by smartphones is a risky lifestyle.

Because of that, they’ve been trying to break into hotter, sexier arenas… like data center chips (aka riding the AI wave without having to go toe to toe with Nvidia) and autonomous vehicle tech.

And yes… they still count Apple as a major customer, which is both a blessing and a “please don’t build your own chips faster than we can find new business” situation.

Now the real question…

Is this actually a smart capital allocation move… or just financial engineering with good PR?

Because if fewer people are buying new phones, repurchasing shares won’t fix the underlying issue.

But if those diversification plays finally show up… this might go from “coping mechanism” to “low-key genius.”

We’ll find out soon enough.

The Team at Bullseye Trades