(NASDAQ:AMZN) is getting a warm reception from more than just deal-sniffing shoppers these days. Convinced that the company's market-share gains will pay off for investors, JPMorgan analyst Imran Khan upgraded the leading online retailer this morning, from "neutral" to "overweight." Khan's price target now rests at $65.

Amazon's market-share gains are nothing new, of course. The company has been defying gravity for most of the past three years. It accelerated its top-line growth until it eased its foot off the gas in the second half of 2008. 

Amazon is clearly still growing faster than the rest of the market. It even had its "best ever" holiday shopping season last month, just as Amazon's dot-com rivals followed real-world chains into the tank.

Whether Amazon's margins held up during the cutthroat season remains to be seen, but you have to like the company's odds. As the fulfillment partner for many high-profile third-party merchants, including Target (NYSE:TGT), Amazon has a steady stream of referral revenue coming in. It's also just as conveniently positioned as (NASDAQ:OSTK) is to offer closeout deals from distressed merchants.

Over the years, Amazon bears have argued that bricks-and-mortar chains such as Wal-Mart (NYSE:WMT), Target, and Sears Holdings' (NASDAQ:SHLD) Sears stores will eat up cyberspace. Some of have fared better than others, but they're still no match for Amazon.

I think the key to Amazon's success is its Prime membership program, with which customers pay $79 a year for free two-day shipping of Amazon-stocked items. It's a lot like paying for membership at warehouse clubs such as Costco (NASDAQ:COST) or BJ's Wholesale (NYSE:BJS). Once you're a member, it just doesn't make sense to go anywhere else.

So what can hold Amazon back at this point? Well, the stock's valuation is certainly not bargain-bin fodder. Shares are trading 55% higher since bottoming out two months ago. Even Khan's price target of $65 is just a roughly 20% advance from where the stock is at right now. However, it's hard to bet against what may be one of the only retailers bragging about its performance in the holiday shopping season.

Short Amazon at your own peril.

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