Amazon.com Inc. (NASDAQ: AMZN) got an important upgrade today.

Sanford C. Bernstein increased its rating on the stock from "market perform" to "outperform." The firm also raised its price target to $95 from $81. The stock opened up at about $81.

Bernstein assumes that Amazon's margins will rise due to higher third-party sales on the website. Amazon receives a fee for these sales.

The huge online retailer's stock has been as high as $89 this year, and it is up more than 100% year-to-date. Short interest in the shares fell 4.8 million to 35.8 million as some investors anticipated a price increase.

Third-party fees are not the only reason the stock is doing well. But, it is something of a surprise that an analyst believes that it can do even better after its big run.

Yesterday I liveblogged the speech given by Microsoft CEO Steve Ballmer at the Sanford C. Bernstein Strategic Decisions Conference, and if you read that, you already know: Microsoft is planning to keep investing significant dollars in operating expense, despite the shock-and-awe felt by the Street.

But now that the transcript's available on Microsoft's web site, I'd like to point you to a couple of Ballmer's justifications for this expense. He says that it's important to be on the front end of innovation (not exactly the place Microsoft's been known to be these last several years) and that the hardest decision was, what to invest in? "   When I first talked to Bill Gates about this and some of our other senior technology guys, Ray Ozzie, they came back with a list of, I don't know, 70 things. I said, Bill, you can't have a list of 70 things. He said, but there's 70 things, Steve. And I said, you've got to pare it down. He said, no ... with an R&D budget that's going to come on $7 billion, we could probably afford to do 60 or 70 different things."

What are those 70 things, though? The one thing he talked about most: obliterating paper. You heard me right. Steve Ballmer told the investors gathered at his talk, "I look in this audience, and I see a lot of paper and pencil. Ten years from now, I won't see paper and pencil if we in the hardware industry do our jobs right. Pencil and paper will be replaced by superior technology that is digital." If he has anything to do with it, it will be Microsoft that profits from the death of paper and pencil.