Amazon. com, Inc. (AMZN): Will the low profit margin model work?

Investors question for how long and why doesn't the company make money. What is important is that the stock appreciated 52.39 percent in 2012. Cyber Monday last year reflected the increasing popularity of shopping online for convenience and lower prices. There are still challenges for Amazon in its cost management and big name competitors.

Before I delve deeper into Amazon stock, I want to say here that I am extremely proud of becoming an official Seeking Alpha contributor. It was my first attempt and I did get a lot of comments that wasn't too appealing. But hey, I love constructive feedback and I will work on it so that I will get more positive and 'I like your analysis' sort of comments.

When looking at Amazon on Google Finance, the P/E ratio of 3679.06 jumps at you. I just want investors to know that this extremely high P/E isn't necessarily a bad thing. The thing I wish to highlight here is an estimate of the global e-commerce market in 2016 which is expected to be $1 trillion according to Morgan Stanley analyst Scott Devitt.

Investors want to know when this company will start to prioritize making money as its objective. eBay (EBAY) and Wal-Mart (WMT) are stepping up their game in offering same-day delivery. Furthermore, Best Buy (BBY) and Target (TGT) want to deter “showrooming” by matching prices with their online competitors.

Competitors are spending lots of money to gain an advantage in products and services that Amazon is offering. Take Netflix (NFLX) for example, the internet streaming giant spends $2.5B on content costs annually; an avenue that Amazon spends only $700M but which is still staggering even for a company the size of Amazon (market cap - 122.52B).

This 3-month Amazon stock chart looks good for chartists and Amazon bulls (a rarity these days) will be well pleased; myself included. MACD is a great tool for technical analysts. The MACD has crossed above the signal line and this shows a bullish sentiment heading into trading on Friday January 18, 2013.

The bears want to say that AMZN is heading to a less prosperous future, but the fact is that the stock has broken above its 50 day moving average and has remained over its 200 day moving average. Its been going nowhere but up in the long-term trend.

Amazon is doing something right if most research analysts are rating the stock as a "buy". There are finance titans like Goldman Sachs and Bank of America-Merrill Lynch who see the stock appreciating further with price targets in the $300s.

This is just the first of many equity research reports here. I want to give you equity research reports on Google (GOOG) and eBay (EBAY) by the end of this month.

Stay tuned for the down low on those hot stocks.