Many things in life have a first-mover advantage. However, in investing, the first company to come to the marketplace with a product isn’t always the winner. A company that follows up with a better product or a far lower price point can end up grabbing the most market share.
That’s particularly true in the tech space. Today’s successful tech companies prefer to either buy a company on its way to winning, or wait until they can overtake the early movers.
That makes Amazon’s (AMZN) move into artificial intelligence (AI) so compelling. The company has managed to become a tech conglomerate by moving into other areas in the past, such as web hosting, after learning the lessons provided by others.
The move could also improve the company’s market share in areas such as web hosting, thanks to the ability to integrate AI into its existing product suite.
Action to take: With shares still down a third over the past year, now may be the time to build or add to a stake in shares. And look to add further on any drop under $100, at least for investors with the long-term in mind.
For traders, shares have been gradually moving up since the end of last year. The September $110 calls, last going for about $7.30, offer mid-double-digit gains in the months ahead on a further rally in Amazon shares.
Disclosure: The author of this article has a position in the company mentioned here, and may further trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.