Amazon’s stunningly successful growth strategy has created a context in which, as one observer put it, “no profits, no problem.” But is this strategy just valid for this moment in history, a consequence of a brilliant innovator surfing the economic tsunami of this digital era? Is it imitable by other disruptive innovators? Is there a way to model how investors interpret whether such a strategy is sustainable? And what events might cause investors to rethink their unmitigated admiration of Amazon?

For years founding CEO Jeff Bezos has convinced investors that profits should be immediately invested for even more growth. Some pundits, however, are vexed to explain why Amazon isn’t punished by investors for being a perpetual adolescent, promising innovation and growth but not conventional returns. Even growth companies, they argue, must eventually turn a profit.

On the other hand, Amazon’s strategy has rewarded investors with a steadily soaring stock price and ever-increasing market capitalization. Indeed, Amazon today is worth more than Walmart, Costco and Target – combined. Amazon’s growth in value since its diversification into formerly unrelated fields such as selling computing capacity via its Amazon Web Services business has been remarkable.