Here’s Why Amazon’s Big Gains Will Only Get Bigger

amazonRetail superpower Amazon.com, Inc. (NASDAQ:AMZN) just received a glowingly bullish review from Jeff Reeves at MarketWatch this morning.

Reeves notes that even with AMZN’s recent gains (+120% last year, +14% YTD, +60% from February lows), the shares will have plenty of room to run, despite ongoing criticisms.

The bears have the same old argument about Amazon’s forward price-to-earnings ratio being too high (it’s still north of 70), as well as some new ones now that the growth rate in the much-vaunted Amazon Web Services division is starting to cool.

However Amazon on balance remains one of the best investments on Wall Street right now.

Reeves’ bullish rationale boils down to seven factors:

  1. Sudden profits – The company has swung away from posting constant quarterly losses to now growing impressive EPS.
  2. Big AWS growth – AMZN’s cloud computing unit grew revenues by an impressive 58% in Q2.
  3. A slew of analyst upgradesWe pointed many of these out recently, but analysts are absolutely smitten with this stock right now.
  4. Prime is huge – Amazon’s membership service now boasts 69 million members — consider that Costco has 81.3 million.
  5. Retail dominance – Controlling 74% of the U.S. e-commerce market, Amazon has almost no competition.
  6. Kindle sales are up – Kindle Fire is now the #3 tablet in the world, and has seen massive sales improvements in recent quarters.
  7. International growth – Amazon is making big inroads in India, a market just begging to be disrupted.

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