Why do I have this feeling that once Amazon drives most brick and mortar stores out of business that they're prices on everything will skyrocket? Is this why the share price is up where it is?
No.
Each major investor will have their own view, but the bank I work for has taken the view that the AWS platform alone would eventually justify the current share price. Only about 10% of data centers have been migrated to the cloud, and there's only one or two other big players.
Next up comes its logistics platform. If volumes dropped they could diversify the operation relatively easily, setting themselves up as a global competitor to almost any other operator. Amazon will end up, post drone deployment & automated vehicles, with one of the most automated and efficient logistics platforms in the world, with a massive barrier to entry for competition due to the scale and cost of machinery, and various patents its likely to own.
Then comes R&D. The reason Amazon don't make more profit is because they don't want to. That isn't the business model. Their earnings are mostly ploughed back into the business to expand their offering and locations in which they operate. Profit is taxable, business investment isn't.
Finally, the sheer volume of what they sell. Stick 1p on each product and you'll hardly notice the sales fall. You will notice the profit increase.
Whatever your personal moral view of Amazons operating model, you've got to see that it is highly effective, and impressively dynamic for a company of its size. Whether or not you like capitalism, Amazon has mastered the game like few other businesses. That's why the share price is where it is.... I just wish I had more disposable cash to buy shares in it.