Why Amazon stock was moving higher on Tuesday

A tie-up with PayPal's Venmo seemed to push it higher.

| More on:
Person buying from Amazon through their smartphone.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Shares of Amazon (NASDAQ: AMZN) were gaining today after PayPal Holdings (NASDAQ: PYPL) announced that users of its payments app Venmo will be able to buy products on Amazon with the app starting next year.

Amazon shares were up 2.5% at the close today, while PayPal stock was down by double digits, but the latter was more a reflection of a disappointing earnings report.

So what

While the news is a bigger deal for PayPal than for Amazon, it does show that Amazon is taking steps to make shopping on its site even easier for customers. And it follows a recent announcement that it would partner with Affirm Holdings to allow customers to use its buy now, pay later service, another step to expanding customer access.

Venmo has more than 80 million users and functions as a de facto bank account for many of them, who skew toward millennials and young adults.

In the earnings release, PayPal CEO Dan Schulman said, "We're thrilled that we are teaming up with Amazon to enable customers in the U.S. to pay with Venmo at checkout."

Now what

While the Venmo tie-up seems unlikely to move the needle for Amazon, which recently passed Walmart as the world's largest retailer, it does show the company is thinking strategically. And such decisions could make a difference in marginal purchases for users who prefer the convenience of Venmo or have money in their Venmo accounts that they'd like to spend.

The deal could also trigger more such partnerships for Amazon, including with Square's Cash App, as the tech giant looks for more ways to encourage shoppers to spend money on its platform. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Jeremy Bowman owns shares of Amazon and Square. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Square. The Motley Fool Australia has recommended Amazon and PayPal Holdings. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on International Stock News

electric vehicle such as Tesla being charged at charging station
International Stock News

Why did the Tesla share price just tumble 7%?

Nasdaq investors just sent the Tesla share price sharply lower.

Read more »

A woman is excited as she reads the latest rumour on her phone.
Broker Notes

Goldman Sachs says this US stock is replacing Tesla in the Magnificent Seven

And no, it's not a tech company. It's in the healthcare sector.

Read more »

A man looking at his laptop and thinking.
Share Gainers

Should I buy Nvidia stock as an Australian investor?

Many Aussies are thinking of jumping on the bandwagon, but they need to think about these issues first.

Read more »

Digital rocket on a laptop.
Broker Notes

Is the Nvidia share price on course to reach US$1,400?

You betcha, says one analyst.

Read more »

A woman holds a soldering tool as she sits in front of a computer screen while working on the manufacturing of technology equipment in a laboratory environment.
International Stock News

Could Nvidia become the most valuable stock on earth?

Can anything stop the Nvidia stock price?

Read more »

A group of young ASX investors sitting around a laptop with an older lady standing behind them explaining how investing works.
International Stock News

What can ASX investors learn from Warren Buffett's latest buys and sells?

We've just found out what Buffett's been buying and selling recently.

Read more »

electric vehicle such as Tesla being charged at charging station
International Stock News

Why Tesla stock tanked in January

Will the electric vehicle leader see earnings decline once again in 2024?

Read more »

A woman sits at her computer with her hand to her mouth and a contemplative smile on her face as she reads about the performance of Allkem shares on her computer
International Stock News

Will Nvidia stock be worth more than Microsoft by 2030?

The graphics giant has been growing at a much faster pace than Microsoft, but can it sustain that momentum?

Read more »