Cathie Wood's Ark Invest Upbeat On Walmart's Partnership With Google Parent's Drone Unit

An analyst from Cathie Wood-led Ark Investment Management is positive about Walmart Inc‘s WMT new partnerships for drone deliveries.

What Happened: Last week, Walmart announced a new partnership with Alphabet Inc‘s GOOG GOOGL drone delivery venture Wing to deliver from two stores in the Dallas metro area. Walmart is also experimenting with other drone companies including Zipline, Flytrex and DroneUp.

Thus far, Walmart has completed over 10,000 drone deliveries across seven states and 36 stores in the U.S. beating the 100 drone deliveries by ecommerce giant Amazon. However, these 36 stores account for less than 1% of Walmart’s U.S. stores.

In Dallas, Wing’s drones operate ‘beyond visual line-of-sight.’ “In our view, removing the beyond line-of-sight requirement will be critical to achieving a delivery pricing model that could disrupt the exorbitant ground delivery fees unleashed during the COVID crisis,” the analyst wrote.

Why It Matters: Beyond Visual Line of Sight (BLVOS) refers to the distance where drones can operate outside the normally visible range. To fly in the zone, one needs a waiver from the Federal Aviation Administration (FAA).

In its newsletter last week, Ark noted that customers are ditching fast casual food delivery in favor of pickup owing to high delivery charges. Growth in third-party food deliveries touched its peak of 126% during the pandemic in April 2020. However, it has fallen to 6% on a year-over-year basis.

Drones could deliver packages for far less than humans if the FAA relaxed regulations, the investment solutions provider had said.

Meanwhile, an exclusive interview with Wood will air on “The Raz Report” featuring Benzinga CEO Jason Raznick on Aug. 30. The Ark Invest founder said in the interview that every stock has the potential to become an artificial intelligence stock.

Photo Courtesy: S.Galindo On Shutterstock.com

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