• Amazon stock should continue rising this year as its newer revenue streams, like advertising and AWS, grow and the company cuts costs in its retail operations, Jefferies equities analysts wrote.
  • Amazon shares are up more than 30% already this year. Jefferies analysts are projecting growth of at least a further 18%.
  • Ads on Prime Video alone could generate nearly $3 billion in fiscal 2024, their first year of existence, the analysts wrote.

Jefferies analysts believe the growth of Amazon’s (AMZN) Amazon Web Services (AWS) and advertising divisions could significantly boost the company’s revenue, profit margin, and stock price. The analysts maintained a “buy” rating, raising the price target to $235 from $225, which represents an 18% increase from Amazon’s current share price of just under $200. They also suggested a potential rise to $285 if these revenue streams grow faster than expected.

AWS revenue grew 17% year-over-year to $25 billion in the latest quarter, driven by the expanding cloud storage and generative AI industries. The advertising business, newly integrated into Amazon Prime Video, could generate nearly $3 billion in sales for fiscal 2024. Amazon shares have already risen over 30% this year, closing 2023 at $151.94.