Will Wall Street ever sour on Amazon?

The e-retail giant continues to blow off the whole making-a-profit thing

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On Thursday, Amazon posted a loss of $7 million, or 2 cents a share, for the second quarter, off a giant $15.73 billion in revenue — a 22 percent increase from the same quarter last year.

This is nothing new. Amazon is used to posting razor-thin profits or losses each quarter, while plowing enormous amounts of revenue into building and evolving the company, mixing risky investments with more dependable ones. And Wall Street loves it, seeing in it a strategy to dominate industries so thoroughly that the competition withers and dies (see: Borders, Best Buy).

This quarter, Amazon spent hundreds of millions on licensing agreements to build a video library like Netflix's, part of an effort to keep pace as video, books, and other media — which in total account for 28 percent of Amazon's sales — shift from physical to digital forms. Meanwhile, it also continues to invest in original content, and is planning the release of a phone. All together, Amazon spent $1.59 billion on technology and content this quarter, 47 percent more than last quarter.

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And that's just one category. The online retailer also spent like nuts on warehouses as part of its push toward offering same-day delivery — a possible death sentence for both online and brick-and-mortar competitors — as well as grocery services.

It's easy to see why there's not much left over to kick back to shareholders.

So far, they don't mind at all. Investors have pumped the stock up some 21 percent this year already, and after Amazon released its latest report, the price barely fluttered.

"On some level, I think some people are buying the stock because they're hoping for that investment cycle to begin to reduce," an analyst told The New York Times. "If they pull back on spending, you're going to see that operating margin tick up."

Still, the stock price is hardly a steal. One way to judge a company's value is to look at the price-to-earnings ratio, which measures its stock price against its monthly earnings. Amazon's price is about 132 times earnings over the next 12 months. Compare that to Google, which is priced at just 15 times earnings.

And look at poor Apple, which literally made more than 7 billion times more money than Amazon last quarter, only to run up against investor skepticism once again.

However, not everyone is just sitting back, waiting for profits to start rolling in. "The clock is ticking for Amazon to show that it can sell its goods and services while making a profit that might start to justify its market capitalization," an analyst told Bloomberg.

And Tom Cheredar at Venture Beat wants more information:

The bland financial figures would be fine if Amazon's entire business was pretty simple…like selling lemonade. But it's not: The company has various, nontraditional strategies for success — like selling Kindle tablets at cost or its "free shipping" Prime membership service — which presumably are working because Amazon hasn't gone under. Beyond that, we know nothing. [Venture Beat]

But does CEO Jeff Bezos feel the any pressure to change? Businessweek's Brad Stone doesn't think so:

Amazon's chief executive doesn't concern himself with Amazon's quarterly earnings report or with Wall Street's visceral reaction to it... Bezos manages Amazon for the long term and regularly mucks up the bottom line with expensive, risky bets on unprofitable new businesses such as grocery deliveries and tablets. [Bloomberg Businessweek]

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Carmel Lobello is the business editor at TheWeek.com. Previously, she was an editor at DeathandTaxesMag.com.