Analysts were hardly throwing in the towel after Amazon.com Inc. delivered a nasty drop in profits, but at least one suggested investors may need to get used to the idea that the company is going back to its old ways.

Amazon AMZN, +5.69% shares fell 3.6% in premarket trading on Friday, after it reported late Thursday that earnings plummeted 77% in the second quarter on higher-than-expected spending. Its profit forecast was also well below Wall Street expectations.

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“Amazon seems to have entered another investment cycle, similar to the 2H14-1H15 period,” said Edward Yruma and a team of analysts at KeyBanc Capital Markets. During that period, Amazon saw weaker profits and big revenue as it spent more.

The KeyBanc Capital team expects Amazon’s spending will remain high for the near to medium term, and investments and competition will continue to weigh on earnings. Continued price competition from Wal-Mart Stores Inc. WMT, +0.90% will “continue to act as a headwind,” said the analysts, who maintain a sector weight rating on shares.

Piper Jaffray analysts, meanwhile, reiterated their overweight rating and $1,200 price target, saying it was a chance for investors to jump in on the company that has seen a nearly 42% share gain year to date.

“Our main takeaway is that stock weakness around margin-related misses are typically good buying opportunities for AMZN — we do not see this margin guidance miss vs. unguided expectations as a sign that Amazon’s long-term margin expansion is at risk,” said a team at PiperJaffray led by Michael Olson.

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And investors probably wouldn’t take issue with any of the initiatives about to get Amazon’s pledged capital expenditure or operating dollars.

“We continue to remain positive on Amazon as we see the company as a long-term secular grower with leadership position in two large growth markets - e-commerce and cloud (with a third - advertising - ramping quickly) and expect numbers to move higher over time,” wrote Susquehanna Financial Group analysts led by Shyam Patil. “Periods of elevated levels of investment are to be expected and, in our opinion, make sense given the large total addressable markets (TAMs), the company’s positioning, and strong track record of execution.”

Susquehanna assigned Amazon shares a $1,250 price target.

Benchmark also supports the investment, saying it “likely came via the capacity, distribution and AWS verticals.”

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“[W]e continue to prefer the trade-off for more sustainable top-line growth, and would use any pullback today as a longer-term buying opportunity,” analysts wrote.

Benchmark rates Amazon shares buy with an $1,150 price target.

All of the spending, which fuels the convenience, innovation and expansion that puts Amazon ahead of the pack, is critical for the company to maintain its lead position at a time when competitors are ramping up their own efforts.

“[W]e would caution that others are trying to catch up, most notably Walmart which is investing more in online both through acquiring new brands and enhancing its service,” wrote Neil Saunders, managing director of GlobalData Retail. “In our view, this does not pose a near-term threat to the Amazon juggernaut, but over the longer term, it has the potential to take the edge off market share growth, especially in the U.S.”

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Hedge-fund manager Doug Kass, who has been calling on investors to sell Amazon shares, repeated that advice in an emailed note to clients, commenting that he saw “little that is encouraging in Amazon’s second-quarter report.”

The company’s free cash flow is not growing and its Amazon Web Services slowed to a rate of 42%, as it begins to get crowded in the cloud space with competition from Microsoft Corp. MSFT, +2.40% and Alphabet’s Google Inc. GOOGL, +2.07% .

Kass has also maintained that Amazon faces a potential antitrust threat because it is disrupting so many different businesses — auto parts, appliances, and now, food retailing with its bid for Whole Foods US:WFM .

“Third-party sellers are avoiding taxes on its platform. AMZN is attracting a sizable stable of enemies and old-line retailers like Wal-Mart and Best Buy BBY, +1.56% have proven they can compete against it,” said Kass.