Jeff Bezos holds up the new Kindle Fire at a news conference during the launch of Amazon's new tablets in New York
Amazon's Kindle Fire has "re-set the audience dynamic" with its low $199 price. What does the Fire mean for Amazon's stock? REUTERS

Amazon.com's Kindle Fire tablet has revitalized the tablet segment, primarily via pricing, but that's hardly a transgression in U.S. commece, hence it goes without saying that I'm Reiterating my Buy rating for Amazon.com (AMZN), first discussed here on Oct. 3, 2011 at a price of $211.98.

What's more, in my interpretation, we're looking at a Camelot in tech -- one in which a variety of devices in tech, from several suppliers, raises the profile of the value and utility of the gadgets -- including introducing a new segment of society to the products. Amazon is part of the mix and that bodes well for the stock, long-term.

Kindle Fire Creates Positive Chatter

Amazon's (AMZN) new Kindle Fire tablet, like the launch of Apple's (AAPL) iPhone 4s, has created a buzz around Amazon's stock, which traded Thursday at mid-day up 49 cents to $237.30.

Look for Amazon's revenue to surge 40-45 percent in 2011 to $46.8 billion, after a similar 40 percent gargantuan gain in 2010, largely driven by market share gains, international expansion, and equally significant, new hardware products, including the Kindle Fire tablet.

Meanwhile, margins in 2011 will decrease, due to competitive pressures, offset partially by third-party sales.

To be sure, the new Kindle Fire tablet, priced at a bargain-basement $199, will not displace the Apple's iPad, but it will lay the groundwork for a more-sophisticated tablet device. For now, Kindle Fire's major selling point will continue to be content, with the company continuing to derive a healthy revenue stream from the product's staple ebooks -- Amazon has millions of ebooks. The device will also likely be streaming video and music capable, able to receive apps, and contain a Web browser.

Amazon is calculating that its $199 Kinder Fire will offer enough of a content experience to lure potential iPad buyers who are not thrilled about plunking down $499 for a tablet device.

Amazon.com: An Online Retail Gem

Outside of Kindle Fire, Amazon's unique business model continues to impress investors. The online bookstore that's forced the closure of many brick-and-mortar bookstores, Amazon has wowed analysts with its successful expansion in to electronics, movies, music, games, toys, apparel, and shoes, among other categories.

What's more, Amazon has an enviable long-term plan, investing in Amazon Prime, Kindle/Kindle Fire and digital content.

A strong balance sheet, long-term customer relationships, and online business acumen practically say back up the truck from an investment standpoint, regarding AMZN.

The Thomson Reuters First Call FY2011/FY2012 EPS estimates for AMZN are $2.06 and $3.32, and each EPS estimate looks about 10 percent low, according to my analysis.

Technical Stats

Technically, Amazon's shares have been in an uptrend in 2011, but with higher-than-normal volatility. AMZN pushed higher from $160 in the winter to $220 in August, before plunging to about $175. The stock has since recovered to about $238. Extended dips below the key, 50-day moving average have been the recent norm with AMZN, hence patience is required: the stock is not investors who panic at the sight of a 10 percent dip. There is the risk of a short-term double-top at/near $240, but the view form here argues the uptrend is stronger and should prevail. The stock should trade above $250 by the end of 2011 and above $325 by mid-2012.

Stock Category: AMZN is ideal for investors who want a growth company with plenty of upside potential. Don't expect a calm ride up to higher levels, however. There's only a 10 percent chance you'll lose your entire investment with AT&T over a 10-year period. There is no dividend.

2011 Outlook: I view AMZN as a long-term play, but if you're looking to sell AMZN within the year, it's probably best to take your profits after it rises to $240-249, if it fails to rise above $250.

Stock Analysis: Amazon.com is a moderate-risk stock. If an investor has already purchased the company's shares, I'd hold them. If not, I'd consider buying a 50% position in AMZN now. Under any circumstance, I wouldn't buy more than 75% of my AMZN position before January 2012 and I'd put a sell/stop loss at: $140.

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Disclosure: L.C. Jacobs of New York, N.Y. reviews stocks on a quarterly, semi-annual, and annual basis.

L.C. Jacobs has no positions in stocks reviewed, but does own federal, municipal, and corporate bonds.

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