Amazon.com Inc (NASDAQ:AMZN, ETR:AMZ)’s Amazon Web Services (AWS) growth acceleration and greater visibility on Cloud AI revenues are expected to be key positives for the company in 2024, Bank of America analysts asserted.
In an update to clients, the analysts raised their price objective on Amazon stock to $185 per share from $168, noting that 2024 should see more retail margin upside for the eCommerce giant, aided by Prime Video ads, while AWS revenue growth that is expected to reach 17% by the third quarter should close the gap to its peers.
They also see potential positives for Amazon in US eCommerce acceleration, as reopening and inflation headwinds fade, and more Logistics-as-a-Service traction.
As well, Amazon management sees a "gigantic" opportunity for AI-driven demand.
Amazon's Inferentia and Trainium chip technology could also see greater appreciation by Wall Street, the analysts acknowledged.
Analysts at Bank of America, however, cautioned that upside risks for the stock this year include a potential slowdown in consumer spending, uncertainty surrounding AWS competition, and a competitive threat from China’s TikTok.
Shares of Amazon rose 0.6% to $154.69 in midday trading on Thursday.