Big Jumps In Amazon (AMZN) And Level 3 (LVLT) Signal Tech Hopes

By Douglas A. McIntyre Published Jul 10, 5:17AM EDT

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Amazon (AMZN) rose 4% yesterday on no news. So did Level 3 (LVLT). Odd that both happened on the opening day of earnings season.

Other tech firms like Google (GOOG) are also moving up and trading around their highs, but Amazon and Level 3 represent the dream of endless internet growth better than most other companies.

It is very old news that Amazon’s shares are up 100% this year. But, it is based on a wonderful assumption that may or may not be true. If Amazon builds out enough new services, it can stay ahead of the falling margins of its core e-commerce businesses in the US. With new initiatives including VOD and selling use of its huge tech platform to other enterprises, this may work. As long as the commerce engine of the internet stays strong.

Level 3’s rally is also based on the ideas that video over the internet and internet commerce in general will improving. Its massive bandwidth pipeline infrastructure can only get higher prices if demand demand keeps rising sharply. Video is the driver of that assumption. And, video use may expand forever.

Measuring video trends is not terribly hard. YouTube and digital TV growth are fair proxies. Amazon’s new ventures and Level 3 will do well if the bell weathers stay strong.

Douglas A. McIntyre can be reached at [email protected].

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.