Bull vs. Bear: Amazon.com

With its stock price hitting an all-time high and trading for more than 300 times earnings, can Amazon.com (Nasdaq: AMZN  ) continue to defy gravity? Can the Kindle Fire, Amazon Prime, Amazon Web Services, and other initiatives help Amazon maintain, or even expand, its impressive top-line growth? When will big gains on the revenue side finally show up in Amazon’s profits? Most importantly, can Amazon’s stock still be a profitable investment from here?

Fools Buck Hartzell and Matthew Argersinger debate. Watch the video below to get their insights, and let us know in the comments section below what side you're on. And if you have another stock you'd like to see Fool analysts do a bull-bear on, let us know that too!

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Matthew Argersinger has the following options: long JAN 2014 $200 calls on Amazon.com, short JAN 2014 $200 puts on Amazon.com, and short SEP 2012 $75 puts on Netflix. The Motley Fool owns shares of Amazon.com, Netflix, and PepsiCo. Motley Fool newsletter services recommend Amazon.com, eBay, Netflix, and PepsiCo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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Comments from our Foolish Readers

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  • Report this Comment On September 15, 2012, at 11:40 AM, Treborn822 wrote:

    Great video - I am definately on the Bull side but also hoping for a pull back so I can add to my position at lower cost.

    PE ratios have to be viewed with a grain of salt. If investments that are not mandatory pull down earnings then the PE ratio can get out of whack like it is today and is misleading.

  • Report this Comment On September 15, 2012, at 6:03 PM, playForever wrote:

    The bull side clearly has no experience about the stock bubble time in year 1999-2000. At that time CSCO has much higher growth ratio in both revenue and income(that's why it even has about $40B cash). It was traded as high as around $80. Take a look at the CSCO now. It

    is traded around $20. Once its growth ratio is less than 15%, PE ratio becomes more important.

    The stock price will be back to reasonable PE ratio.

    Comments about AWS itsself worth as much as current AMZN stock price completely does not make sense. Go figure out its revenue/income and growth rato, and more importantly the competition in the market and what's the total market before making the comments.

    I am on the bear side because

    * Retail business will have big impact due to the sales tax, and more tough competition from ebay, walmart, and many online retail(especially some still doesn't charge sales tax).

    * Kindle Fire is a joke. It tries to make a closed system based on Google Android. People will be pissed off when they realized it doesn't have Google map and can not access Google email account. Amazon better do spend more on R&D to come up its own email and map.

    * Its digital product(e-book/music/video) revenue will have more competition from Google, Apple, Microsoft and even walmart. Google/Apple/Microsoft all have

    mobile OS and devices that are used by consumers.

    * The cloud computing is so far a goog part of Amazon business . However, more serious competition are coming now. Oracle/Microsoft/IBM/Google/Apple and many smaller players just started coming. Eventually, margin and growth will be smaller and smaller.

    Amazon stock may continue go higher, but it also could collapse 20-30% in an overnight anytime once some negative news come out. If you own AMZN stock be really really careful, you have to watch it day by day because the stock is extremely overvalued stock, and traded based on the hype.

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