Can you believe it? Amazon hits $58 a share

Wall Street is having a hard time believing it, shares of Amazon, Inc. (AMZN) have gone up 49% in the last month. In just the past few days the share price has leaped over 30% making CEO Jeff Bezos one happy guy. If things keep going like this he might even get his picture back on TIME magazine like he did in 1999.

So what is everyone really thinking – how long can it last?

Shares are up again today, 2% and the Upgrades are coming in so that all the analysts can make themselves look good and feel better about doubting Jeff and the gang. Just to review, Amazon reported a 32% increase in sales for Q1 07. They are guiding second quarter sales between $2.7 billion to $2.85 billion and operating income of $65 million to $105 million. It only gets better with Bezos saying 2007 sales should come in at $13.4 billion to $14 billion with operating income growth of 19% to 52%.

Wednesday Jim Cramer said, "Do you know that there are hedge funds being put out of business today, because of AMZN?", and suggested that short-sellers "Jump out the window." Yesterday Yaser Anwar did his usual expert analysis on Amazon.com and the picture he paints is one of beautiful green money. Finally, it’s going to get better for AMZN before it get’s worse, so it appears that Bezos has done it again.

Mark Fightmaster at Schaeffers Research said:
"A majority of today’s upgrades simply took the stock from "sell" or worse to "hold," and the step from "hold" to "buy" is a short and simple one that could still provide further positive momentum."

So Wall Street is positive on Amazon for now, but it’s not the big 1-2-shabadoo that everyone thinks it is. They aren’t saying – "Go out and buy AMZN shares today because if you don’t, you’ll be sorry."

Everyone in the world knows about Amazon, and a lot of us have used them from time to time, and we will keep doing so. But to expect the growth and long-term rosy picture that has been painted for the moment, and I stress – "for the moment", everyone just needs to cool their jets and be reasonable. A rating to "Hold" is justifiable, but an all out "Buy" makes me think of another great magazine cover story:

All the Amazon.com enthusiasts just consider the truth – it’s risky.

Frank Lara Jr.
April 26, 2007

Frank Lara Jr. can be reached at [email protected]; he does not own securities in the companies he covers.