's (NASDAQ:AMZN) first quarter was strong on an absolute basis but was hit-and-miss when it came to expectations.

Net sales grew 24% if you disregard currency exchange rates, which topped expectations, and gross margin widened from 24% to 26.6% thanks to a higher mix of third-party and digital sales as well as growth in advertising and Amazon Web Services. Paid unit growth of 30% outstripped sales growth for the same reasons and highlights Amazon's continued gains in market share -- overall U.S. e-commerce probably grew only about 15% last quarter. And operating cash flow continues to ramp up, presumably thanks to higher Prime membership growth and more sales coming via third parties.

Amazon has been a busy bee. Last quarter alone, it widened international distribution for Kindles, announced plans for five new distribution centers, extended Amazon Prime into Canada, introduced Amazon Coins, acquired GoodReads, and unveiled 14 pilots for original shows. (I recommend the Onion News Empire.)

But back to the numbers, where not everything was hunky-dory. Paid unit growth was the slowest in almost four years -- a soft economy outside the U.S. didn't help -- and second-quarter sales guidance was a bit below Wall Street's expectations. To Amazon's credit, eBay's first quarter also came in unexpectedly light, which has me thinking that Amazon's cooldown is as much about macro trends as it is about Amazon itself. And with unit growth of 30% -- double the broader online economy and almost triple eBay's -- it's safe to say that there's plenty more growth ahead.

Profit remains elusive, as usual, as Amazon heavily invests in new distribution centers, marketing, and content. But I'm 100% supportive of these investments because they're enhancing Amazon's self-perpetuating competitive advantages. I am increasing my intrinsic value estimate a bit to $330 from $315 and my buy-below price to $270 from $260.