Amazon.com Inc. (NASDAQ:AMZN) as an Investment Option

Amazon.com Inc. (NASDAQ:AMZN)’s shares performed very badly in the morning. Currently, the company shares are trading at $280 in the pre-market trading. This is 10% less than the closing price for Amazon.com Inc. (NASDAQ:AMZN)’s shares. The investors would have to face losses of about 30% Y2D.

The press believes that the reason behind Amazon.com Inc. (NASDAQ:AMZN)’s loss is the scarcity of income. However, that is just part of the story. It is true that the company had to face a huge loss. As Amazon.com Inc. (NASDAQ:AMZN) had predicted, its net income was disastrous. The company itself said that it will be facing more and more losses with, and in, time, in 1997.

Amazon.com Inc. (NASDAQ:AMZN) had never focused on earnings per share. It offers discounts worth $80 billion and its growth rate is 20%. Their operations manage to generate 8.5% of the total cash flow only. If you want to compare Amazon.com Inc. (NASDAQ:AMZN) with another company then the best candidate is Target Corp. (NASDAQ:TGT). This company generates about the same amount of revenues and has the same cash flow statements. The growth rate of Target Corp. (NASDAQ:TGT) is below 2% annually.

As an investment, Amazon.com Inc. (NASDAQ:AMZN) might not be the best choice right now. There are two big issues that must be considered:

The company is a retailer that is expanding overseas, not just domestically. When it comes to U.S.-based retailers, going overseas is equivalent to commencing a land war with Asian nations. Amazon.com Inc. (NASDAQ:AMZN)’s growth rate in North America is 25% while that abroad is 14%. This is a big problem too. The company can potentially achieve the highest growth rate in China, but unfortunately, China’s market is dominated by Alibaba Group Holdin Ltd. (NASDAQ:BABA).
The second problem with Amazon.com Inc. (NASDAQ:AMZN) as an investment is that it is too big a company to become rich. The best growth that the company can achieve is through the cloud. Presently, Amazon.com Inc. (NASDAQ:AMZN) is competing against Apple Inc. (NASDAQ:AAPL) and Google Inc. (NASDAQ:GOOG) in terms of software and hardware.

Amazon.com Inc. (NASDAQ:AMZN) introduced Kindle; they are the pioneers in e-reading. But now, the company is competing against the tech-giant Apple Inc. (NASDAQ:AAPL), that produced the top-of-mind technology on a regular basis. For now, in order to stand in the competition, Amazon.com Inc. (NASDAQ:AMZN) has sufficient funds to be spent on the hardware inventory. However, it will be foolish to assume a victory. Amazon.com Inc. (NASDAQ:AMZN) has hammered the last nail in its coffin now.

If you talk about Amazon.com Inc. (NASDAQ:AMZN) as an investment, then the company stock is most probably overvalued. Yet, you cannot bet that the stock will go all the way to zero. That will not be the smartest conclusion. Amazon.com Inc. (NASDAQ:AMZN)’s obsession lies in serving the customers and providing quality services. Any retailer who is so focused on their customers cannot just go out of business. The company will probably find a way to survive these troubles.