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Shares of Amazon (NASDAQ:AMZN) fell 11% on Wednesday after a disappointing earnings report earlier in the week but gained 4% back Thursday. In the aftermath of this volatility, many investors are wondering, ��What��s next?��

It��s not easy to say. On one hand, AMZN stock still is up 15% since Jan. 1 and up 60% since 2010. On the other hand, there��s a lot to be said for knowing when the ride is over — and there are warning signs things could be getting rocky for Amazon.

But never fear. Today we��ll make sense of the mayhem with a hard look at the pros and cons of Amazon, finishing with a clear decision on whether now is the time to buy or sell this tech giant.

Let��s take a look now at the pros and cons of Amazon stock:

    

Pro: Red-Hot Sales

Perhaps the most encouraging figure from Amazon��s earnings is that revenue climbed 44% year over year to $10.9 billion. That is a huge figure and a huge rate of growth.

True, profits were a big disappointment as earnings totaled a mere $63 million on the quarter, significantly missing forecasts. But it��s important to note that the shortfall was not caused by a slowdown in the sales of books and electronics, and rather because Amazon spent more.

Many companies can juice profits in the short term by stock buybacks that boost earnings per share or through layoffs and various cost-cutting measures. True growth, however, has to come from growing sales — and Amazon clearly has that.

Consider this: Fiscal 2010 revenue totaled over $34 billion, easily double the $14 billion in 2007. Fiscal 2011 revenue is tracking almost $49 billion, easily double the $19 billion in sales for 2008. Fiscal 2012 revenue is forecast to top $60 billion, easily double the $! 25 billi on in 2009.

See a trend here? Doubling your revenue every three years — especially for an established blue chip like Amazon — is a pretty impressive feat.

    

Con: All That Sales Cash Squandered

Of course, tens of billions in revenue makes the lack of profits that much more disturbing. And worse, Amazon is now projecting a loss for the current quarter.

The company isn��t spending all that dough on private jets, of course. The lion��s share of that cash is going to build 17 new fulfillment centers this year. But the moves clearly indicate Amazon isn��t nearly the zero-overhead online storefront some investors mistakenly believe it is.

What��s more, Amazon has taken a costly gamble on its new Kindle Fire tablet by heavily subsidizing the gadgets. The theory is that if Amazon sells the devices at almost break-even for $200, it can find a foothold as a low-cost alternative to the Apple (NASDAQ:AAPL) iPad. After the Kindle Fire catches on, it will start to pay for itself with content sales — eBooks, apps and the like.

That��s fine in theory, but many investors are skeptical AMZN might be left holding the bag. Brokerage firm Stifel Nicolaus summed it up pretty succinctly in a recent ratings cut on the stock: “Amazon continues to invest in high-growth opportunities at the expense of near-term profits.”

    

Pro: One of the Few Companies With Vision

One could rightly argue that a myopic CEO can doom a company to failure. The fact that founder and CEO Jeff Bezos continues to take the long view for his company should be an inspiring sign to shareholders — even if! it mean s short-term pain.

Consider that the original Kindle hit the market in 2007, just a few months after the iPhone was born and while terms like ��e-books�� and ��tablets�� didn��t exist in casual conversation. Years of costly research and development went into this product, which reinvented publishing as we now know it.

Where would Amazon be if it refused to spend its time and money on this innovative product four years ago?

For every analyst lowering his price target on AMZN stock, there are others who admit the necessity of Amazon spending now if it wants to keep up its impressive track record of breakneck growth. Bank of America Merrill Lynch experts recently said Amazon remains the best way to play e-commerce and that the Kindle Fire could be a catalyst for even bigger growth.

    

Con: Amazon��s Gamble is YOUR Gamble

Of course, there��s no way around the fact that Amazon��s long-term gamble is your long-term gamble, and its short-term pain could be your short-term pain as a shareholder.

And the reality is there could be much more short-term pain to come.

“Given that Amazon is selling these hardware devices at a loss, the return on their sales won’t show up in Q4, but farther into 2012 and beyond,” a Yankee Group researcher told the E-Commerce Times this week.

In short, the current high-spending, low-profits environment at Amazon will continue for months as Amazon bankrolls Kindle Fire manufacturing. And after the initial push, we��ll have to wait even longer to see whether the bloom falls off the rose and whether the the gadget can hang tough against the Apple iPad.

And after all that, we��ll have to wait longer to see if profit indeed materializes from secondary sales of content as Kindle Fire owne! rs start shopping for books, TV shows, apps and other goodies on their new gadgets.

How long are you willing to wait to know?

    

Pro: The Smart Money Still Likes Amazon

Here��s the clearest endorsement of all for Amazon stock: Hard price targets by some of Wall Street��s top analysts and investment bankers.

Yes, Stifel Nicolaus cut its rating on Amazon, but it still rates AMZN stock a ��buy�� and its price target went down from $280 to $265. Amazon currently is trading under $200 — so that��s hardly a bearish call.

Evercore Partners also cut its rating and target — from $290 to $260. Again, 30% upside from here despite a ��gloomier�� outlook.

Out of 25 brokers surveyed by Thomson/First Call, the median target is $260 and the mean target is about $245.

Things indeed are complicated right now at Amazon.com because of the Kindle Fire launch. But there��s still an average target of 20% to 30% profits in this stock anyway.

That��s because the Kindle Fire remains only part of the story. According to comScore, in June 2011, Amazon was visited by 282 million people, or 20.4% of the world��s online population. Think about that: 1 in 5 folks with an Internet connection visit the site each month!

Even if the Kindle Fire never becomes what Amazon hopes it will be, there still are avenues for Amazon to succeed. Some of Wall Street��s biggest investors have managed to remember this — and so should you.

The final verdict: Amazon is a good “buy” at $200.?

One final note of caution: It��s worth pointing out that Amazon.com doesn��t pay a dividend. If you are a long-term investor, you have little incentive to bide your time in this stock unless you expect a steady ascent in share pr! ice.

That said, most reports are enthusiastic about the Kindle Fire, and its rock-bottom price should allow it to compete with the Amazon iPad. Bezos recently noted that advance orders for the gadget are much higher than expected.

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