Target price of $140! Analyst: Amazon is the first choice for internet stocks.
Bernstein analyst Mark Shmulik has raised Amazon's target price from $125 to $140 and maintains an "outperform" rating.
Among the many large technology stocks that have performed well, Amazon's stock still appears particularly attractive.
This is the view of Bernstein analyst Mark Shmulik.
Despite rising 45% this year, Shmulik still calls it his "preferred" in internet stocks this week.
Amazon is the preferred internet stock
Shmulik believes Amazon's story is "untapped potential" with room for improvement in both retail and Amazon Web Services.
Shmulik said Amazon has market share in retail and operating profit margins seem to be "improving."
Although Amazon's pre-pandemic profit margin in the US retail business was 4%,
He pointed out that Amazon's total US merchandise sales this year may even exceed Walmart's sales in the US.
He raised the target price of Amazon's stock from $125 to $140 and maintained a "stronger than the market" rating.
Cloud and other businesses
In terms of cloud business, Shmulik believes that Amazon is "about to hit bottom before recovering growth" due to customers becoming more cautious in the current environment, but there are a large number of backlogged orders.
In addition, Amazon's profits may benefit from recent layoffs and other measures to reduce employee-related costs, such as freezing hiring and reducing salaries.
Shmulik also sees some new, overlooked areas where Amazon can make a big push in the future.
In Shmulik's view, Amazon's Buy with Prime business could bring opportunities of $30 billion to $50 billion.
The company's media business is also attractive, according to his calculations,