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Comment by Zakuzaa | Hacker News Reader

Can someone with knowledge explain to me why is AAPL's P/E 12.99 and AMZN's 130.72?

Source: Google Finance.

Investors don't believe AAPL can appreciate significantly more than it is already valued. A mature blue-chip stock has a P/E ratio of 8 - 12.

More generally, it is really hard to compete with AMZN, because they maintain such narrow margins. AAPL relies on continued (hit-generating) innovation which is prone to distruption.

  > AAPL relies on continued (hit-generating) innovation
  > which is prone to distruption.

And as history shows, the disruptor is Apple itself.

The uncertainty now is that they don't have Steve Jobs.

I hope, for Apple's sake, they don't become Steve Ballmer's Microsoft.

iPhone was introduced after 2,5 years since inception. I guess they have some stuff in pipeline for some years to come, also (I hope) the culture is still there.

One possible contributor is Amazon Web Services. The revenue from AWS is currently hidden under 'other' in the company's earnings reports, but analysts believe it comprises most of that category, which totaled over $500M this quarter, a 58% increase over Q4 last year. That means AWS was close to a billion dollar business in 2011 and will certainly surpass that in 2012. Besides being an even faster-growing market than online retail, it's likely that the AWS margins are higher than retail as well.

Also, Amazon makes a lot (and I mean a LOT)of their profit/revenue in smaller websites and companies: http://ripetungi.com/wp-content/uploads/2009/12/amazon-compa...

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