Amazon Bears Take Cover

And on Tuesday, CEO Jeff Bezos said the company would continue to invest indefinitely in new Web services like computing and storage it will be selling to other companies.

But not everyone is a convert in the wake of Amazon's impressive quarter. In a research note on Wednesday, J.P. Morgan analyst Imran Khan pointed to the company's rich valuation as a cause for concern. The average large-cap Internet stock trades at about 41 times 2007 and 32 times 2008 earnings estimates, Khan noted. Amazon, meanwhile, trades at 50 times 2007 and 42 times 2008 estimates. J.P. Morgan makes a market in Amazon shares.

"Is Amazon a Buy? We think the valuation is too rich," he wrote. "While Amazon's 1Q was solid, we think the valuation may not offer much upside."

For Amazon shareholders, Wednesday's stock performance should be enough upside for now.