Perhaps, but there's an even bigger disconnect between Amazon's current market cap and the best case scenario of what they could be earning if they did focus on

Perhaps, but there's an even bigger disconnect between Amazon's current market cap and the best case scenario of what they could be earning if they did focus on short-term profitability. Let's take a simplistic look at what their earnings would have looked like last year if they had only spent half as much on R&D ($6.565B) with no adverse affect to their bottom line. Add $3.283B to their actual net income of $0.274B for a total of $3.557B of potential earnings. Taking their current market cap of $146.58B (after today's 11.19% drop) and that still gives them a P/E of 41x. Obviously, these numbers are pretty rough, but even if they had spent $0 on R&D, they'd still have a pretty high P/E. Maybe the share price is hurting more because the market is actually taking a 2nd look at the valuation, and not because they didn't realize what Amazon's strategy was.