Amazing Amazon

Cramer’s expecting technology stocks to make their seasonal move after Labor Day, and he said is the way to play it.

An incredibly strong quarter and a product with iPod-like potential are the big factors as Cramer sees them.

Amazon reported a huge 46% earnings beat, including items and one-time gains, back on July 24. Even more important maybe are the sales numbers, though. Revenues were $100 million, or 2.5%, more than the Street expected. So while the rest of retail was struggling, Amazon earned 41% more in year-over-year sales growth.

You might think that high gas prices fueled higher online shopping than visits to brick-and-mortar stores, but at the end of the day Amazon is a retailer like any other, Cramer said. And with inflation coming down, this company should end up doing ever better.

Then there’s the Kindle, Amazon’s e-book reader, which accounted for 10% of all books sold last quarter. Cramer said the projected 400,000 units sold by the end of the year look like Apple iPod numbers. So “it looks like Amazon has a major gadget on its hands.” He called the Kindle a “game changer.”

Amazon also stands out when you compare the company to others in the online space. Amazon has better operating growth than Google, and it’s beating eBay in sales volume and customer acquisition. Amazon’s margins are lower than Google and eBay, but Cramer said that just makes it easier to add new products and services – like the Kindle and the Prime program, which offers free shipping for a yearly subscription fee.

There’s also a new service being tested, AmazonFresh. It’s an online grocery store where customers who order before midnight have their orders by dawn. It just makes sense for Amazon to move in this direction – they sell everything else, why not food? – and Cramer thinks there’s potential here.

Amazon is a buy, he said, as long as it’s trading near $80 a share.

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