In the midst of the stock market's downturn, shares of Amazon.com Inc. (AMZN) have put in a startling performance. The stock thus far has withstood the downdraft by rising 1.05% from the close on January 26 through the close on February 7. During this period, the S&P 500 Index (SPX) has dropped by 6.7%, the Dow Jones Industrial Average (DJIA) by 6.5%, and the tech-heavy Nasdaq Composite Index (IXIC) by 6.0%.

It seems likely that Amazon will continue to outperform even if the market's decline steepens.

Amazon also has shined compared to the other four mega cap tech stocks in the FAANG group, which have retreated during this period: Google parent Alphabet Inc. (GOOGL), down 11.1%; Apple Inc. (AAPL), down 6.98%; Facebook Inc. (FB), down 5.17%; and Netflix Inc. (NFLX), down 3.66%, as you can see by the chart below.

FB Chart

FB data by YCharts

'Swallowing Industries Whole'

No one single reason can account for the remarkable confidence that investors continue to place in Amazon's stock. However, Scott Galloway, a professor of marketing at NYU and a serial entrepreneur, may have summed it up best. Amazon is "going everywhere and swallowing industries whole," as he told Barron's in September.

Moreover, Galloway suggests that Amazon's core competency, at least in its dealings with investors, is storytelling. Its shareholders, he claims, are mesmerized by the prospects for future growth, and pay little attention, if any, to current earnings. The current action in Amazon's stock price suggests that its stockholders also are largely unconcerned about swings in the broader equities market. Analysts at Morgan Stanley project that Amazon is well on its way to achieving a market cap of $1 trillion. (For more, see also: Amazon May Soon Become Market's 'Trillion Dollar Bull'.)

Meteoric Rise

Amazon went public in 1997, priced at $18 per share. Accounting for subsequent stock splits, the adjusted IPO price becomes $1.96 per share. The closing price on February 7 was nearly 723 times higher. Investors who got on the Amazon bandwagon a decade later also reaped hefty gains, though not nearly as eye-popping. Today a share in Amazon is worth only - we stress only - 20 times more than it was 10 years ago. Not bad.

In a stock market noteworthy, or notorious, for historically high valuations, Amazon stands out, with a trailing P/E ratio of 230 times EPS, and a forward P/E ratio of 94 times earnings, per Yahoo Finance. Despite all the hand-wringing about an excessively pricey stock market in general, analysts also seem unfazed by these lofty valuations for Amazon. The consensus 12-month price target for Amazon is $1,635 per share, according to Nasdaq.com, implying a 15.4% gain from the close on February 7.

Already, Amazon's year-to-date performance is impressive, outperforming tech stocks including Apple, Facebook and Alphabet.

FB Chart

FB data by YCharts

Highly Opportunistic

Amazon has proven to be a highly opportunistic company, very successful so far, as Scott Galloway notes, in entering a wide array of new markets and achieving a dominant market share. From an online seller of books and music, it has branched out into selling virtually every conceivable category of merchandise. Along the way, it began renting space in its online storefront to other merchants who could not hope to achieve a similarly high online profile on their own.

Having built up massive computing capacity to support its core retailing business, Amazon has leveraged excess capacity into successful cloud computing and video streaming services. To enhance the attractiveness of its video streaming service, Amazon has become a major producer of original entertainment programming. It also is moving aggressively to sell advertising space on its site, and analysts at Wells Fargo see Amazon as a growing threat to the duopoly in digital advertising now controlled by Google and Facebook. 

The company's opportunism is extending to markets to which it has laid waste, most notably brick-and-mortar retailing. Having acquired Whole Foods Market, Amazon is looking to increase the upscale grocery chain's sales by leveraging its expertise in delivery services, The Wall Street Journal reports. After putting many traditional bookstores out of business, Amazon is starting to open physical bookstores of its own.

The mere announcement that Amazon would be part of a joint venture designed to reduce medical costs sent healthcare stocks crashing and its own shares rising, despite no concrete details on this initiative. This illustrates both how seriously Amazon is taken as a competitive threat wherever it goes, and how confident its own investors are in the company's ability to become a dominant force. 

Not Invincible

Like any market behemoth, Amazon certainly is not unstoppable, illustrated by the cautionary tales of giants like IBM Corp., A&T Inc. and Microsoft Corp., which once seemed invincible only to stumble badly. In Amazon's case, with excessively high valuations come extremely lofty expectations. While Amazon's investors are still focused on revenue and market share growth, per Scott Galloway, a serious earnings disappointment, or a notable slowing of growth rates, could hammer the stock price. Also, Amazon's growing dominance is sparking increasing political pushback in both the U.S. and in Europe, with calls to restrain Amazon or break the company up. As the company destroys jobs in traditional retailing and gains market share, it may face intense antitrust action.