Amazon is a stock for long-term investors, analyst says

Amazon becoming more & more profitable: Analyst
Amazon becoming more & more profitable: Analyst
Amazon's big beat
Amazon's big beat
Amazon crushes quarter
Amazon crushes quarter
Amazon surges post-earnings
Amazon surges post-earnings

Amazon's Jeff Bezos scored big in the stock market Friday, evidence that investing for the long term can pay off, one analyst told CNBC.

Shares of Amazon surged nearly 10 percent Friday after the internet retailer posted earnings of $1.07 per share, on $29.13 billion in revenue, crushing the 58 cents per share on $27.98 billion in revenue predicted by a Thomson Reuters consensus estimate. The Thursday earnings beat left Bezos swimming in more than $5 billion in extra wealth, on paper.

Impressive as it might be, unless you can stomach the ups with the downs, Amazon might not be the investment for you, Mark May, internet analyst at Citi, told CNBC's "Squawk on the Street."

Jeff Bezos, founder and CEO
Amazon posts EPS of $1.07, shares pop 12%
Jeff Bezos
Jeff Bezos makes another $6B on Amazon earnings

"I would advise investors that are focused on quarter-to-quarter profit to maybe look somewhere else," May said Friday. "For investors that have a view that's more consistent with Bezos' or Warren Buffett's ... that take a longer-term view, and are believers in the long-term vision of Bezos and the Amazon story, it's more appropriate for them."

Bezos is known to pull on the profit lever one quarter, only to plow money back into the company and post a loss the next, said Victor Anthony, managing director and internet media equity analyst at Axiom Capital Management, Friday on CNBC's "Squawk Box."

"I wouldn't get too excited," Anthony said. "I think Amazon, historically, has gone through these investment cycles."

"Over the long term, this is a multidecade company," Anthony added. "They're in the early innings, I think, of consolidating the retail environment."

Bezos has always been clear that he would focus not on quarterly profits, but on long-term growth for Amazon, Richard Brandt, author of "One Click: Jeff Bezos and the Rise of," told CNBC late last year. It's not unlike the philosophy of Berkshire Hathaway's Buffett, who ahead of the annual shareholders meeting told CNBC on Friday he feels like a "10 on long-term optimism."

Lately, Amazon has shifted toward to the explosive growth of its high-margin cloud services business, while also investing in logistics that will incrementally make its core retail business more profitable too as costs decline over time, said May.

Amazon CEO Jeff Bezos is sizing up locations for its second US headquarters. Among the criteria: convenient access to mass transit and an international airport, a highly educated labor pool, a strong university system and a diverse population.
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"Headlines are really just talking about AWS, but I think the standout this quarter is really the retail business," said Anthony. "That grew significantly faster than the Street was expecting."

And with retail at nearly 90 percent of Amazon's revenue, those logistical investments can pay off a lot, said May.

"I think the biggest impact here is that the company, on a consolidated basis, is just becoming more and more profitable," May said. "And I think that not long from now, Amazon is going to be generating $20 to $30 a share in earnings. And to the surprise of some of the skeptics out there, you can actually value Amazon more and more on earnings."