It's really not expensive. Why? Profits are low because Amazon has invested over $10 billion dollars in 2012 alone on fulfillment centers and huge data centers. Did they have to invest that much money in 1 year? No they didn't. That money could have gone to the other side of the ledger, and AMZN management could have easily just posted a big EPS instead of reinvesting the capital. When you consider the company has a $120 market cap, but invested $10 billion back into the business instead of showing a large EPS, AMZN is not expensive. And you know people were saying the exact same thing when AMZN was trading at $45.......looked just as expensive then as it does today. A couple other interesting AMZN points. There are about 365 million shares of float, and Jeff Bezos own about 25% of the float personally. Finally, I don't see any direct competitor to AMZN, and IMO AMZN already has the most sophisticated and most efficient distribution system in the world.
You hit the nail on the head. The reality is that Amazon is cheap. Just in the 4th Quarter alone, Amazon invested $3.785 billion dollars on it's infrastructure. Hedge funds know this and the smart money has given mr bozos the green light on his capital investment plans.
Folks invested billions to build houses...what happened in 2008?
Sales have already slowed for AMZN. All the infrastructure has an upkeep cost. They hired 32,000 new folks this year. That's a huge cost. They are becoming just another retailer, but unlike other retailers, they are not profitable.