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Amazon’s Massive Distribution Network in One Giant Visualization

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Amazon's Massive Distribution Network in One Giant Visualization

Amazon’s Massive Distribution Network in One Visualization

View the high resolution version of today’s graphic by clicking here.

Last year, Amazon shipped over 5 billion (with a “B”) Prime packages, and the retail giant’s ecommerce market share in the U.S. is on the verge of surpassing 50%.

Moving that kind of volume takes an impressive amount of technical sophistication, manpower, and distribution infrastructure. While Amazon does lean on third parties for deliveries and warehousing, the company is also building an increasingly expansive distribution network in an attempt to manage the entire process.

Today’s visualization, which uses comprehensive data from MWPVL International, examines the estimated 124 million square feet of active space in the U.S., as well as the 40 million in Amazon’s construction pipeline.

To create our graphical footprint of Amazon’s warehouses in the infographic, we’ve used satellite imagery of every Amazon facility in the U.S. and stitched it all together.

Pieces of the Puzzle

There are a few types of facilities that make up the vast network of Amazon’s warehouses:

Crossdock Centers
Containers from foreign vendors can be held at a crossdock facility until more stock is needed at the fulfillment center. This is the back-end of the distribution chain.

Fulfillment Centers
Fulfillment centers are the most common type of facility in Amazon’s distribution empire, but they serve a wide variety of purposes.

Amazon began building its distribution network in 1997, starting with two fulfillment centers in Seattle and Delaware. The two spaces would be tiny compared to today’s standards at 93,000 and 202,000 square feet, respectively. Now, there is nearly 100 million square feet of active fulfillment center space, with another 35 million on the way.

Sortation Centers
These facilities are responsible for sorting packages by zip code which are then typically delivered to USPS sites. Since being introduced in 2014, sortation centers have allowed Amazon to speed up the delivery process and to help control the distribution process up to “the last mile”.

Delivery Stations
In urban areas, delivery stations are often the last step in the chain before packages reach a customer. Courier companies – and increasingly Amazon Flex drivers – typically handle these short-range deliveries. These stations are often located near airports.

Prime Now Hubs
These smaller locations are specifically designed for speed. Prime Now hubs carry a more limited selection of items – including Whole Foods inventory – that are delivered within two hours of clicking “buy”. There are currently around 50 of these facilities in urban areas around the United States, but that number is expected to increase dramatically in the near future.

Prime Air Hub
Amazon doesn’t own its own airport yet, but the recently announced $1.5B international Prime Air Hub is a step in that direction.

The 210-acre parcels will help Amazon expand its Prime Air fleet while reducing its reliance on companies like UPS and FedEx. Kentucky is a natural choice for the hub as there are already 11 fulfillment centers in the state.

Fighting for the Last Mile

Over the years, Amazon has optimized every aspect of the distribution system, but one final hurdle remains.

Conquering the last mile – the final leg before a package reaches its destination – has proven tricky, in part because USPS already has a well-honed strategy for delivering to all the nation’s residents.

The company’s earnest recruitment drive for Amazon Flex is the latest in a long line of attempts to decrease reliance on third parties for package delivery. Also, by tapping into on-demand labor, Amazon hopes to reduce costs and have more flexibility during volume surges like Black Friday.

This desire to own the entire process is being reflected in the company’s roster of distribution facilities. The massive fulfillment centers aren’t going anywhere, but we may see a lot more smaller delivery hubs in cities and towns across America.

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Nvidia Joins the Trillion Dollar Club

America’s biggest chipmaker Nvidia has joined the trillion dollar club as advancements in AI move at lightning speed.

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Nvidia Joins the Trillion Dollar Club

Chipmaker Nvidia is now worth nearly as much as Amazon.

America’s largest semiconductor company has vaulted past the $1 trillion market capitalization mark, a milestone reached by just a handful of companies including Apple, Amazon, and Microsoft. While many of these are household names, Nvidia has only recently gained widespread attention amid the AI boom.

The above graphic compares Nvidia to the seven companies that have reached the trillion dollar club.

Riding the AI Wave

Nvidia’s market cap has more than doubled in 2023 to over $1 trillion.

The company designs semiconductor chips that are made of silicon slices that contain specific patterns. Just like you flip an electrical switch by turning on a light at home, these chips have billions of switches that process complex information simultaneously.

Today, they are integral to many AI functions—from OpenAI’s ChatGPT to image generation. Here’s how Nvidia stands up against companies that have achieved the trillion dollar milestone:

Joined ClubMarket Cap
in trillions
Peak Market Cap
in trillions
AppleAug 2018$2.78$2.94
MicrosoftApr 2019$2.47$2.58
AramcoDec 2019$2.06$2.45
AlphabetJul 2020$1.58$1.98
AmazonApr 2020$1.25$1.88
MetaJun 2021$0.68$1.07
TeslaOct 2021$0.63$1.23
NvidiaMay 2023$1.02$1.02

Note: Market caps as of May 30th, 2023

After posting record sales, the company added $184 billion to its market value in one day. Only two other companies have exceeded this number: Amazon ($191 billion), and Apple ($191 billion).

As Nvidia’s market cap reaches new heights, many are wondering if its explosive growth will continue—or if the AI craze is merely temporary. There are cases to be made on both sides.

Bull Case Scenario

Big tech companies are racing to develop capabilities like OpenAI. These types of generative AI require vastly higher amounts of computing power, especially as they become more sophisticated.

Many tech giants, including Google and Microsoft use Nvidia chips to power their AI operations. Consider how Google plans to use generative AI in six products in the future. Each of these have over 2 billion users.

Nvidia has also launched new products days since its stratospheric rise, spanning from robotics to gaming. Leading the way is the A100, a powerful graphics processing unit (GPU) well-suited for machine learning. Additionally, it announced a new supercomputer platform that Google, Microsoft, and Meta are first in line for. Overall, 65,000 companies globally use the company’s chips for a wide range of functions.

Bear Case Scenario

While extreme investor optimism has launched Nvidia to record highs, how do some of its fundamental valuations stack up to other giants?

As the table below shows, its price to earnings (P/E) ratio is second-only to Amazon, at 214.4. This shows how much a shareholder pays compared to the earnings of a company. Here, the company’s share price is over 200 times its earnings on a per share basis.

P/E RatioNet Profit Margin (Annual)
Apple30.225.3%
Microsoft36.136.7%
Aramco13.526.4%
Alphabet28.221.2%
Amazon294.2-0.5%
Meta33.919.9%
Tesla59.015.4%
Nvidia214.416.19%

Consider how this looks for revenue of Nvidia compared to other big tech names:

For some, Nvidia’s valuation seems unrealistic even in spite of the prospects of AI. While Nvidia has $11 billion in projected revenue for the next quarter, it would still mean significantly higher multiples than its big tech peers. This suggests the company is overvalued at current prices.

Nvidia’s Growth: Will it Last?

This is not the first time Nvidia’s market cap has rocketed up.

During the crypto rally of 2021, its share price skyrocketed over 100% as demand for its GPUs increased. These specialist chips help mine cryptocurrency, and a jump in demand led to a shortage of chips at the time.

As cryptocurrencies lost their lustre, Nvidia’s share price sank over 46% the following year.

By comparison, AI advancements could have more transformative power. Big tech is rushing to partner with Nvidia, potentially reshaping everything from search to advertising.

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