AWS, Advertising Trends Can Lift Amazon Stock, Analysts Say [Video]

The growth of two of Amazon’s (AMZN) divisions could drive revenue, profit margin, and the company’s stock price higher as it expands beyond its dominant position in e-commerce, Jefferies analysts wrote.

The company’s bets on Amazon Web Services (AWS) and advertising should provide higher-margin revenue streams as they grow and the company shifts to making its retail operations more profitable, the analysts wrote in a Monday note. They maintained a “buy” rating on the shares, raising their price target to $235 from $225.

The $235 price target would represent an increase of about 18% from Amazon’s share price late Tuesday at just under $200. Jefferies analysts said they see a bull case for shares to rise over 40%, to $285, if AWS and advertising revenue grows faster than expected. Amazon shares have risen over 30% so far this year after closing 2023 at $151.94.

“The two highest operating margin businesses are taking the front stage, driving improving profitability and EV …