Amazon.com Inc. (NASDAQ:AMZN) remains a compelling investment opportunity despite increased infrastructure spending planned for the coming year, according to Bernstein analyst Mark Shmulik, who maintains an "Outperform" rating on the stock with a $235 price target.
What Happened: "Amazon feels like the name that you can put money to work in and get excited about," Shmulik told Yahoo Finance in a recent interview. The analyst highlighted several key factors supporting his optimistic outlook:
- AWS revenue growth shows promising momentum heading into the fourth quarter.
- Prime Video investments are strategically timed for the holiday shopping season.
- Core business operations are "on solid footing and accelerating."
- The company is building the groundwork for "a very solid 2025" in terms of free cash flow.
While acknowledging increased infrastructure spending plans for the coming year, Shmulik emphasized that Amazon's investments typically demonstrate good returns on investment, particularly in areas like Prime Video.
Why It Matters: Amazon's recent financial performance has been noteworthy. The company reported third-quarter net sales of $158.9 billion, an 11% increase year-over-year, surpassing the Street consensus estimate of $157.2 billion.
This strong performance has been a key driver of investor optimism. Amazon's third-quarter earnings also included a positive outlook for the fourth quarter, with expected net sales ranging from $181.5 billion to $188.5 billion.
Additionally, analysts have highlighted the growth potential of AWS, which is in the early stages of a significant AI cycle. The advertising segment is also seen as a fast-growing asset for Amazon.
Furthermore, Cathie Wood's Ark Invest recently made significant trades, including buying Amazon shares, reflecting confidence in the company's growth trajectory.
Price Action: The stock closed at $195.78 on Monday, down 1.09% for the day but up significantly year-to-date with a 30.58% gain. After-hours trading saw a slight decline of 0.34%, according to data from Benzinga Pro.
- Microsoft Co-Founder Bill Gates Says Everyone In Future Will Have A 'Utilitarian AI Agent' That Will Help You At Work
Image Via Shutterstock
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
