There is shrugging off a forecast. Then there is blatantly ignoring reality.
With Amazon (AMZN) this afternoon, we're talking the latter. The stock is up, up and away, soaring 7 percent, clearly flying in the face of reason.
Amazon, which reported their second-quarter yesterday, raised hackles initially with declining profits and a gaping earnings miss. Now…happy days.
The Internet behemoth reported sales of nearly $13 billion, but its net income was a bad joke: a penny a share. Moreover, Amazon is starting to show the strain. The second-quarter miss marks Amazon's second straight, but this will really make your ears bleed: they chipped away at their third-quarter forecast already.
Anyone playing on the field of reason would, as a result, turn a touch picky about chasing Amazon's stock. In a cratering economy (did you read that GDP and weep?) Amazon is spending on warehouses and tablet roll-outs, with everyone from Apple (AAPL) to Wal-Mart (WMT) in its sights. Amazon is spending on a wing and a prayer, hoping against hope to make good. And they might, one day.
Yet for those of you keeping score at home, Amazon is a rock-skip from its record high.
That simply does not compute. A stock should reach an all-time high on something better than hope. For long-term believers in Amazon, there will perhaps be time. But now is not the time.
This stock is up on the promise of a better day in dark days and on false pretenses, rarely a sustainable basis for blasting through an all-time high.