Amazon Goes Big on Cyber Monday

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Dec. 2 (Bloomberg) -- Wedbush Securities Michael Pachter and Bloomberg's Adam Johnson and Cory Johnson discuss the outlook for Amazon with Trish Regan on Bloomberg Television's "Street Smart. (Source: Bloomberg)

Landscape one box at a time.

And we have adam johnson with the trend and cory johnson.

Cory, i understand you are at an amazon center.

Is it busier there today?

I would imagine it is.

At amazon, they are no longer called distribution centers.

In the old days, they had warehouses, and then they had distribution centers, and now they are fulfillment centers, and -- i am keeping up with the lingo here.

I noticed this year as opposed to last year, i was at the same place, i noticed them lining up down the block, and he thinks they are doing a better job of repairing so there are not that many backed up, but they brought in 115 employees on this shift, new workers, and this is expected to be the biggest day amazon has ever had, so as they add product, they will add sales.

Michael, how should we be thinking about this as investors right now, given the stock's current valuation?

My boss and i were talking today about how jeff bezos is probably the smartest man working today.

A visionary leader who does not care about near-term gain.

He cares about the long-term.

He said it repeatedly yesterday.

It is great, but as a shareholder concerned about his or her near-term gain, that can play both ways, michael.

Right, and i have a neutral rating in the 300 $30 price target, so i have trouble coming up with a value -- in the $330 price target, so i have trouble coming up with a value greater than right now's. spending what they generate and investing in future growth and keeping their customers delighted, and they are doing that so far.

And the fulfillment centers are helping out.

Michael, what is going to get them to $5,000 in five years?

There is a point where they will not be able to spend as much money as they have been.

If you look at their profitability in the last three years, they have generated $14 billion in gross profit and have spent it all and have not generated any higher earnings.

They are just going to run into a wall.

They will not be able to spend that much money, and they will do that.

That is maybe two years out or three years out, and then the profits are going to flow.

We are talking about the stock price, and adam johnson is looking at the trend.

Michael says he is believing in the five-year story.

He says it could suffer at least from current valuations in the next 12 months.

What are you saying?

I have got two for you.

You can understand why michael is concerned about this.

The one-year chart on amazon, this thing has gone practically parabolic.

Look at it right there, if we can get this touchscreen to work.

That is the concern.

It has gotten ahead of itself.

It is especially concerning if you consider, trish, this chart, which is not amazon but ecomme rce, in general.

Right now, ecommerce is about seven percent of retail sales in this country.

Forget it.

I am not drawing on it.

This is a very straight chart, but amazon is vertical.

It seems as though investors are catching on maybe a little too late to the ecommerce story.

Yes, it is growing, and not everybody believed in it initially.

I think michael's point, maybe it could be too highly valued, and the parabolic chart does not help.

I am curious.

Have they given you any indication as to what the hottest-selling things are this year?

What is flying off of the shop?

They are talking a lot about tyndale -- dinkindles.

They are singing they are hot because they are trying to sell those.

I certainly spent a lot of money on amazon products and with amazon sales, but the stock has fallen twice in its history about 80%, and it is interesting to think that the company could be in a better lace, but there could be a drop sometime between now and then.

Is there a chance of it getting too big for its own good?

Michael, i will let you answer that one.

They are selling everything.

Actually, i think they will be the world's leading retailer, period.

Not e-tailer but retailer.

I bought halloween candy from them.

I buy everything on amazon, and i think in 10 years, everyone is going to buy everything on amazon.

There is no question they are going to be dominant.

Watch out, walmart.

There are other two great if this is, the amazon web services, 2.5 billion dollars in revenue, and their advertising business, which is never talked about, about $5 billion in revenue.

Michael could be right.

It could be the largest retailer

This text has been automatically generated. It may not be 100% accurate.

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