Investors Questioning Amazon's All-Time High After Q4 Revenue Misses In All Segments

Why is it that Amazon.com, Inc. AMZN's stock is trading near historical all-time highs despite the fact that its fourth-quarter earnings report fell short of consensus estimates in all three of its segments?

This is the exact question MKM Partners' Rob Sanderson answered in a Tuesday report.

Sanderson may have a simple answer to the question: While Amazon's report fell short of consensus estimates, it outperformed retail peers by a "very wide margin" in the fourth quarter. As such, Amazon's stock is benefiting from investors and money managers fleeing from consumer retail stocks into Amazon.

"While unimpressive on the surface, compared to other large retailers, we think Amazon growth of 22 percent in Q4 with a 21 percent growth outlook for Q1 is exceptional," Sanderson said in a note.

Long-Term Growth Story

Sanderson further suggested that Amazon is the "best long-term growth story" available to investors today. He cautioned that recent AWS price cuts and the segment's growing competition make the stock's near-term outlook more challenging.

The AWS segment continues to attract consumer-retail oriented investors who are becoming bullish on Amazon. At the same time, tech investors can find comfort in the fact that AWS gained 210 basis points of the broader cloud market in 2016.

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