Watch For Amazon's Video Announcement

On Wednesday, Amazon will provide an update on its streaming video business.

Apr 2, 2014 at 10:15AM

Investors' risk appetite is healthy right now -- in the sense that it is alive and kicking, not necessarily that it is fully justified -- as the benchmark S&P 500 set a new record high yesterday. It's not just a U.S. phenomenon, either: Today, the FTSE All-World index hit its best level since the height of the global financial crisis. This morning, U.S. stocks are roughly unchanged, however, with the S&P 500 and the narrower Dow Jones Industrial Average (DJINDICES:^DJI) both up 0.02% as of 10:15 a.m. EDT. Investors and analysts, meanwhile, are waiting for (NASDAQ:AMZN) to provide the market with an update on its video business today.


What can we expect from Amazon today in regard to its streaming video activity? A run-of-the-mill business update or a game-changing announcement? There is speculation that the e-tailer will introduce a set-top box that would enable users to stream content to their televisions. This would cut out third-party hardware providers such as the popular Roku and it could put Amazon one step closer to becoming the disruptive actor that fundamentally alters the way people watch television. (To date, no company has really cracked that nut.)

Last month, The Wall Street Journal, reported that Amazon rival Apple (NASDAQ:AAPL) was in talks with cable giant Comcast to offer a streaming television service via an Apple set-top box. However, these talks aren't at an advanced stage, and given the issues that remain to be ironed out, it's not clear the two companies will ever reach an agreement.

Meanwhile, between the subscriber base to its Prime two-day shipping service (which also includes access to Prime Instant Video) and its production of original content, Amazon is in an enviable position to experiment with new ways to deliver or bundle video content and establish a beachhead in customers' living rooms. Amazon recently raised the annual fee on Prime to $99. As Citi analyst Mark May wrote in a note last week, "it does seem clear that Amazon continues to focus on innovation, investment and growth in the areas of digital media (including video) and digital media devices."

For the consumer and the marketplace, Amazon's drive to innovate represents nothing but upside, while longtime investors in the company have certainly been well rewarded. However, it's very difficult to peg Amazon's valuation and, therefore, the prospects for investors going forward -- certainly, the stock's valuation via traditional metrics such as price to earnings are not particularly helpful. Nevertheless, betting against the company and its visionary CEO Jeff Bezos doesn't look like a bright idea.

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Alex Dumortier, CFA has no position in any stocks mentioned. The Motley Fool recommends and Apple. The Motley Fool owns shares of and Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

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The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

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That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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