Walmart Is Going to Kick Amazon's Behind, so Don't Be Surprised When It Happens

 | Jul 14, 2017 | 10:00 AM EDT
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Goldman is dead right on its Walmart (WMT) upgrade.

But since you are unlikely someone with $50 million in the market and a Goldman analyst a phone call away, allow me to put the upgrade into plain English. Here is why Walmart could come roaring back against Amazon (AMZN) over the next five years:

  • There is a talent infusion happening at Walmart that is driving much faster, much more decisive decision making. While the company certainly still has sleepy areas, the retail behemoth is acting quicker and being bolder. In effect, it is turning into Amazon -- except with over 4,000 U.S. stores in prime locations. 
  • And that brings me to point number two. With its purchase of Whole Foods (WFM)  Amazon sent a signal that it can no longer do without stores. People want products quicker, because they effectively have malls in their pockets, in turn putting pressure on shipping costs and warehouse costs. Walmart has all this stuff already -- having this physical base of assets is no longer an albatross, it's a key competitive advantage. Amazon will need these assets, and will be forced to pay up to get them. That's unlikely baked into Wall Street's optimism. 
  • Walmart is proving that it could integrate its online operations with its store operations. Further, the website has become way better and carries a ton more items. Walmart's sales over the last few quarters prove this out. 

Amazon cheerleading fatigue may have just set in on Wall Street...

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More issues for food makers: As if food makers such as Kraft Heinz (KHC) and grocery retailers like Kroger (KR)  and Walmart (WMT) didn't have enough issues on their plate, thanks to Amazon's (AMZN) advances -- now a significant demographic headwind could add further pressure on the packaged food and grocery store sectors in the years ahead, according to Wolfe Research analyst Scott Mnushkin. The U.S. government reported recently that the fertility rate in the U.S. (births per 1,000 women) hit a record low of 62.0 in 2016, with the number of births down about 1% from the prior year. With births declining and immigration slowing, population growth in the U.S. has stalled.

For the aforementioned sectors, Mnushkin points out, it's critical households are formed in order for demand to materialize. Given that it is not happening at a decent clip is troublesome.

All eyes on Apple's iPhone 8, as per usual: Barclays analyst Mark Moskowitz is not buying the projected "super cycle" in Apple's (AAPL) stock, after the tech titan releases its highly anticipated iPhone 8 later this year. Amid reports that the smartphone may not include wireless charging, enhanced 3D technology, or Touch ID, Moskowitz contends that the phone's OLED display, the lone headline feature, won't be enough to convince consumers to upgrade.

"With OLED, we struggle to see the incremental benefits visually that would inspire a customer to replace an adequately-performing device," he noted.

Hard to argue with this one: Count Foursquare co-founder and executive chairman Dennis Crowley among the big fans of Amazon's surprise move to acquire Whole Foods (WFM) for $13.7 billion in mid-June.

Crowley, who built the location intelligence company into a service with 50 million monthly active users across its two apps since founding the company in 2009, spoke with TheStreet'S Natalie Walters at the company's hip headquarters in Soho, New York.

"I can see what Amazon is trying to do there," Crowley said. "I think it's super brilliant." As for what Crowley is up to at FourSquare right now, check out TheStreet this weekend. 

Apple is a holding Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells AAPL? Learn more now.

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