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Is Netflix's Head In The Clouds?

|Includes:AOL, IBM, MSFT, Netflix, Inc. (NFLX)

Netflix Inc. (Nasdaq: NFLX) is a company set on Amazon Web Services (AWS). Investors should still be concerned of its cloud reliability issues as they further consider Netflix future growth outlook. Netflix stock gained 104 percent first quarter 2013, with shares trading above $180. Netflix has sales revenues of $2.16 billion. Netflix is the best-performing stock in the S&P 500 this year. Its stock had jumped 5.6% last month after a Facebook (NASDAQ:FB) sharing feature was introduced. Facebook shares fell 2.7% because the Netflix integration could have caused "oversharing" worries. Netflix has radical management and policies. The company has had a past history of disappointing investors.

The company has experienced cloud risk problems with AWS, having both minor disruptions and major outages. Netflix has been assertive with its consumer strategy, extending tools and code that are not good best practices for future cloud architectures. Last month, Netflix announced a $100,000 prize for those developers who can improve open source tools for its features on cloud computing...

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Stocks: NFLX, AOL, MSFT, IBM