Can't believe that I agree with Balmer
...but I absolutely agree with him on Amazon. Growth rate can't be the only measure by which a business is measured - yet that is exactly what investors seem to be doing year in and year out. Even now, after the recent decline, AMZN has a ridiculous valuation for a business that, after 20 years, still isn't making any money. I'm beginning to doubt there are any real investors left in the stock - it's probably being traded purely on speculation at this point. Unless there are "multi-generational" investors out there who are betting on AMZN eventually making it big and their heirs reaping the rewards.
Think about it - what is AMZN's end game? Dominate all e-commerce? Perhaps even all commerce overall? If either is their goal, that is a very long slog - a journey that, if the last 20 years are any indicator, will include very few profits.
The author was wowed by their $20b in sales - but, heck, AAPL makes that in less than a quarter! Come to think of it, AAPL probably made more profit in its last quarter than AMZN made in its entire existence! Yes, it's growth rate (albeit without profits) are a bit higher than AAPL, but look at the respective stock valuation! AAPL's price to earnings ratio is about 16 - AMZN trades at whopping 700! How is that remotely justified, given that they can't even profit on $20b in business?