In the spirit of World Cup competition, we're holding our own tournament in search of the Better Stock Today. We're pitting 32 companies against each other, and you, the reader, will determine the winner.
Gilead Sciences takes on Amazon.com for this first round-robin match up in our search for the better stock today.
Motley Fool health-care analyst David Williamson makes the case for Gilead Sciences (NASDAQ:GILD) to win this matchup. He believes Gilead's Sovaldi will continue to beat analyst estimates and that its runaway success will continue. Estimated to do $1.4 billion in first-quarter sales, the instant blockbuster clocked in at $2.3 billion. Gilead already has an even better combo treatment in the works, and despite its high price tag, Gilead's future rivals don't appear willing to undercut its cost. With an estimated 150 million hepatitis-C cases worldwide, curing the disease will prove beneficial to humanity and Gilead shareholders.
Fool tech analyst Nathan Hamilton believes the No. 1 reason Amazon.com (NASDAQ:AMZN) should win this match is Amazon Prime. Prime is Amazon.com's subscription-based offering that aligns well with Amazon.com's strategy, where upfront profitability is sacrificed to create a user base that's both profitable and sticky in the long term.
According to a study conducted by Consumer Intelligence Research Partners in 2013, a Prime member spends $1,340 annually, roughly double the amount non-Prime members spend. As a result, free cash flow -- CEO Jeff Bezos' preferred gauge of fundamental performance -- benefits as the company generates a stable source of cash to reinvest in Amazon.com's R&D heavy initiatives. Investors will want to keep an eye on Prime, as it will be a key driver of shareholder value.
Warren Buffett vs. his worst nightmare
Warren Buffett just called this emerging technology a "real threat" to his biggest cash cow. While Buffett shakes in his billionaire boots, only a few investors are embracing this new market, which experts say will be worth over $2 trillion. It won't be long before everyone on Wall Street wises up, and that's why The Motley Fool is releasing this timely investor alert. Click here to learn more about what's keeping Buffett up at night and the one public company we're calling the brains behind the technology.
Vote here to determine the winner of this match, and sound off in the comments. Check back to Fool.com to see who advances in the tournament.
David Williamson and Nathan Hamilton have no position in any stocks mentioned. The Motley Fool recommends and owns shares of Amazon.com and Gilead Sciences. Try any of our Foolish newsletter services free for 30 days. 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.