Shares of e-commerce and cloud computing giant Amazon (NASDAQ:AMZN) have advanced 27% so far in 2024 and about 50% in the past year. The company’s strong execution, aggressive cost-cutting and streamlining efforts, artificial intelligence (AI)-related tailwinds, and dominant position in key businesses have driven the stock higher. The stock recently hit the $2 trillion market cap mark. It is worth noting that Wall Street analysts are highly bullish on AMZN, with the stock expected to deliver further upside.
Analysts Optimistic About AMZN’s Prospects
Amazon delivered upbeat first-quarter results, with net sales rising 13% to $143 billion and earnings per share surging 216% to $0.98 per share. The company’s North America and International retail segments generated sales growth of 12% and 10%, respectively, while the Amazon Web Services (AWS) business witnessed a 17% growth. Additionally, AMZN experienced a 24% increase in its advertising revenue.
With solid performance across key divisions and AI-induced potential tailwinds, Amazon looks well-positioned to drive continued growth in the years ahead. As part of its AI endeavors, the company recently hired executives from AI startup Adept. Amazon has also invested significantly in OpenAI rival Anthropic.
Interestingly, 12 analysts reaffirmed their Buy ratings on AMZN stock in June. Recently, Wells Fargo analyst Ken Gawrelski increased the price target for Amazon.com stock to $239 from $234 and reaffirmed a Buy rating on the stock, calling it his “Signature pick.”
Gawrelski kept his revenue estimate for 2024 almost unchanged, as he expects increased North America revenue to be mostly offset by higher currency headwinds in the International division. However, the analyst raised the price target to reflect the increase in his 2024 operating income estimate by 2.5%, mainly due to higher AWS margins.
Like Gawrelski, JPMorgan is also bullish on AMZN stock. He reaffirmed a Buy rating on Amazon with a price target of $240, calling the stock his “Best Idea.” The analyst expects Amazon to outpace Walmart (NYSE:WMT) as the largest U.S. retailer this year. Moreover, he sees an evolving growth opportunity in AMZN’s Logistics-as-a-service offering.
Is Amazon a Buy, Sell, or Hold?
Ahead of Amazon’s Q2 earnings in July, Wall Street is very bullish on the stock. Analysts currently expect the company’s Q2 EPS to jump to $1.03 compared to $0.65 in the prior-year quarter.
Overall, Amazon earns a Strong Buy consensus rating based on 42 unanimous Buys. The average AMZN stock price target of $221.68 implies about 15% upside potential.
Conclusion
Amazon is proving its capability by delivering strong results across its key businesses despite an uncertain macro environment. The ongoing AI frenzy has boosted the company’s stock price, with Wall Street analysts expecting continued strength.
