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No company is causing as much consternation here at Seeking Alpha these days as Amazon.com (NASDAQ:AMZN).

Shrideep Murthy insists people are paying extraordinary valuations for a less-than-ordinary business. Bill Maurer calls what it's doing smoke and mirrors. EFS Investment asks how long investors will be patient.

But there is a bullish case for Amazon and it comes down to one word: cloud.

While I am among those who expect Amazon to see more cloud competition this year, those who follow its cloud unit most closely are, frankly, amazed at what they are seeing. Amazon does not break out its cloud revenues, but Macquarie Securities of Australia reportedly has good sources there and they estimate the company brought in $2 billion from cloud services in 2012. Lead analyst Benjamin Schachter estimates that will nearly double this year to $3.8 billion and rise to $8.8 billion in 2015.

Place that next to Amazon's total sales and you still don't get a big revenue hit. The company did $40 billion in just the first three quarters of this year, so $2 billion is small beer. Even $8.8 billion would represent just a tiny fraction of the company's anticipated sales for 2015.

But the cloud gives Amazon a chance for margin expansion that retail does not. Even if Amazon spent $2 billion to get that 2012 revenue figure, Macquarie does not expect it to spend nearly that much to reach the 2015 figure. So while retailing is mainly growing the top line, cloud is growing the bottom line.

Add to that the fact that the incremental cost of serving content delivery through Amazon's cloud is near zero, and that the Kindle is increasing the amount of content it's delivering exponentially -- especially as the Kindle Fire starts streaming video -- and you start to see the kind of margin expansion those putting $265 to buy one share expect.

CEO Jeff Bezos continues to dismiss profit as a goal for his company, saying the market is still growing too fast to worry about that. He expects e-commerce to be a $1 trillion business in 2016, and thinks AMZN can take 25% of it. That would be revenue growth of 500% from the 2011 level, a company larger than Wal-Mart (NYSE:WMT) was last year. On that, cloud is a pimple. But it's a profitable pimple, and that's the key.

Amazon is expected to report earnings Jan. 31, and investors will be looking for substantial top-line momentum. In 2011 the company was able to grow fourth-quarter revenues 70% over "normal" levels, thanks to Christmas. Do that on the $13 billion in sales generated for September and you get about $20 billion in revenue, or $60 billion for the year, against $48 billion in 2011. Will that be enough to justify the current stock price absent a positive bottom line?

It might. Despite what the doomsayers say, Amazon could easily be a $300/share stock in February.

Source: Cloud Keeps Amazon Rising