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Keep Betting on Amazon's Bezos: Pros

Amazon CEO Jeff Bezos
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Amazon CEO Jeff Bezos

Investors were disappointed in Amazon.com's quarterly earnings, despite better profitability and a 22 percent increase in revenue. Now, with the stock down sharply, analysts and investors sniff a buying opportunity.

"For a company with this kind of valuation, coming really right in line with estimates, maybe a little bit better on the bottom line, that's going to pressure the stock," Mark Mahaney, Internet analyst at RBC Capital Markets, told CNBC.

But after a sharp drop on Friday, the stock shouldn't go much lower from here, Mahaney said.

(Read More: Hard Not to Be Bullish on Amazon: Analyst)

Analysts and investors point to two impressive numbers in the report—Amazon's 30 percent unit growth and its record 26.6 percent gross margin.

Youssef Squali, an analyst with Cantor Fitzgerald, told CNBC that the 30 percent unit growth is twice as fast as growth in e-commerce in general. Manahey, meanwhile, said unit growth was "unusual" and could re-accelerate in the second half of the year, sending the stock higher.

For a company that invests heavily for future growth, the record gross margin was also "pretty impressive," Dan Morgan, a portfolio manager at Synovus Trust, told CNBC. His fund owns 10,000 shares.

Investors focus intently on profitability at Amazon as it continually pours money into building new distribution warehouses, creating devices like the Kindle and expanding its digital content business.

But since Amazon doesn't tend to tell the Street how much it's going to spend, "it leaves a little bit of uncertainty in the minds of investors," Cantor's Squali, who rates the stock a "buy," said.

(Read More: 'Stay Long' Amazon.com: Gene Munster)

One of those areas of investment may be a new set top box that will put it into greater competition with Netflix and Apple. Already a major player in video streaming, Squali said the move is a smart strategy.

"What differentiates Amazon.com from Netflix is they have AWS, which is one of the largest online platforms for data storage. I think that is something they can use to serve anything from movies to online gaming," he said.

Amazon Should Rebound

For a stock trading at 180 times 2013 earnings, the company has to keep executing on its strategy for the shares to continue to move higher, Morgan of Synovus Trust said.

"As long as they can keep executing and creating new markets for their products, and keep those margins up, we've got to stick with it," he said.

RW Baird analyst Colin Sebastian said the stock is shaping up well for the second half.

"EBay and Google have massively outperformed and we could see a shift back into Amazon in the back half of the year," he said. Sebastian has an "outperform" rating on the stock and a $325 price target. That implies 27 percent upside from current levels.

Mahaney also told CNBC, "We'd be buyers on this kind of weakness." If Amazon stock gets as low as $230 or $240, then you "back up the truck," he added.

By CNBC's Justin Menza; Follow him on Twitter @JustinMenza

Additional News: Amazon Earnings Top Forecasts as Revenue Jumps

Additional Views: Netflix Entering a 'Virtuous Cycle': Pro

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Disclosures:

Amazon is an investment banking client of Cantor Fitzgerald and the firm makes a market in Amazon securities.

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