[halfninety]

"The P/E ratio is, quite literally, the number of years required to pay back a stock's purchase price at constant dollars and earnings."

Yes, this is what I mean. I'm no expert on stocks and am not familiar with the terms, but the principle should be there.

Say the "normal" P/E is around 15, which means that people think it's fair to be able to recoup the stock's price in 15 years. Now why Apple's P/E is only 10? That's because people think its future earnings will drop (in statistical sense), so that the current price will still be recouped in roughly 15 years. Similarly, Google's P/E is 20+ because people think its future earnings will rise, so that again the current price can be recouped in roughly 15 years.

Amazon's large P/E isn't that abnormal if you consider that there are plenty of companies which are losing money yet still have a positive stock price. Maybe they have lots of assets, and maybe people expect them to return to profitability soon.

For struggling large companies this can even be a gamble. If you think the company has a 5% chance of returning to glory and earn big, and 95% chance of never earning a profit again, the company can still have a pretty decent expected future earnings in statistical sense.