Mark Krieger submits:
There are a lot of stubborn bears out there that still are shouting “overvalued” when it comes to Amazon (AMZN), the trouble is, nobody is paying attention to them as the shares just keep on moving higher and higher. At a market cap of $58 billion, Amazon’s valuation is a mere 10% from its all time high. It is slated to grow its earnings to $2.91 in 2010, and another 34% to $3.80 in 2011, reaching a forward multiple of 34 times earnings. The question is, How much of these expected earnings gains are already factored into the stock price? Speculators are betting that Amazon delivers earnings even higher than these lofty expectations, but can Amazon pull another rabbit out of the hat? I don’t think so!
This type of speculation is reminiscent of a bubble or house of cards. As long as these gamblers have a greater fool to unload their shares to, the stock will continue to gain traction. We all know the final conclusion to a speculative frenzy: A spectacular implosion. I’m not saying this will happen, but It certainly reasonable to theorize that the higher the shares rise, the riskier they become. I’m not saying we are at "tulip craze" levels yet, but it could easily end up that way.