Amazon Inc.’s stock has already increased over 50% this year. However, Roth MKM’s Rohit Kulkarni believes that there are four reasons why Amazon’s stock is still worth loving. In a note to clients, Kulkarni named Amazon as his top large-capitalization internet stock pick and discussed opportunities related to margins, cloud computing, cost savings, and artificial intelligence.
Kulkarni wrote, “We believe the Street continues to underestimate potential leverage via recent cost-cutting, reductions in workforce, and logistics efficiency initiatives. And, we view Amazon as one of the biggest beneficiaries from stable commodity inflation, a stable global supply chain, and stable workforce compensation trends.”
He predicts that Amazon could save $9-13 billion next year, which will help benefit margins. Kulkarni also believes that Amazon has potential to surprise Wall Street by expanding within its AWS cloud computing business. If the management provides data points in July that differ from expectations, shares could rise drastically according to Kulkarni.
Kulkarni lifted his price target from $130 to $155. He also maintains a buy rating on his “top pick” for Amazon.
Amazon Stock Could Soar According to Analyst
According to one of the most bullish analysts covering the market, Amazon’s continued stock success is due to several key factors. Analyst Youssef Squali notes that Amazon is balancing savings from office-space initiatives with an expected uptick in AWS costs, which could boost the stock. Additionally, the company’s approach to AI strategy sets it apart from rivals like Microsoft and Alphabet.
Squali notes that Amazon’s approach to AI feels like “AI Tech For Everyone” compared to other mega-cap companies. He predicts that Amazon could “close the AI gap” with competitors. Squali also likes Facebook and Alphabet shares; he views all three mega-cap stocks as “significant medium-term beneficiaries from the ongoing [generative] AI wave.”
Other analysts offer even bolder predictions for Amazon’s stock growth, with some suggesting it could soar to $180. Despite challenges from rising costs and increasing competition, Amazon remains a strong player on the market.
