Cantor keeps Amazon stock as Top Pick, forecasting 2025 growth and margin improvements

On Wednesday, Cantor Fitzgerald reaffirmed a positive stance on Amazon.com Inc (NASDAQ:AMZN), maintaining an Overweight rating and a price target of $270.00. The research firm highlighted Amazon's strong positioning among mega-cap companies, with its current market capitalization of $2.43 trillion and impressive year-over-year return of 49%.

According to InvestingPro data, the company is trading near its 52-week high of $233, anticipating potential outperformance in key performance indicators (KPIs) for both the fourth quarter of 2024 and the first quarter of 2025.

The firm's analysis suggests that investor sentiment is already aligned with the positive short-term outlook for Amazon, supported by the company's strong revenue growth of 11.93% and healthy gross profit margin of 48.41%. Cantor Fitzgerald believes that the stock has additional growth drivers for the year ahead. The firm pointed out that Amazon Web Services (AWS) is likely to see continued acceleration, benefiting from the growing demand for artificial intelligence (AI) capabilities, particularly in inference workloads.

Cantor Fitzgerald emphasized AWS's robust infrastructure and well-established customer relationships as key factors that will contribute to its growth. The firm also noted that Amazon's retail segment is expected to see margin expansion in 2025, thanks to fixed cost leverage, despite potential headwinds from the company's Project Kuiper satellite internet initiative.

The analyst's commentary underscored the importance of the Long-Lasting Memory (LLM) AI layer within Amazon's technology stack, which is becoming increasingly competitive and cost-efficient. This advancement is expected to give AWS a significant edge in the market.

In summary, Cantor Fitzgerald reiterated its confidence in Amazon's performance and potential for the coming year, citing AWS's acceleration and the retail segment's margin improvement as catalysts for the company's stock value. The firm's $270 price target reflects this optimistic outlook, aligning with the broader analyst consensus of Strong Buy.

With earnings scheduled for January 30th, investors can access comprehensive analysis and 16 additional key insights through InvestingPro's detailed research reports, available as part of their coverage of 1,400+ top US stocks.

In other recent news, Amazon's Retail Ad Service, a new initiative designed to extend the e-commerce giant's influence beyond its own marketplace, has been highlighted by Macquarie analysts as a potential market expander. BMO Capital Markets has raised Amazon's stock price target to $265, citing expected growth in Amazon Web Services (AWS) and positive trends in the company's retail segment.

Meanwhile, Truist Securities has maintained a Buy rating for Amazon, naming it their favorite mega-cap, largely due to steady gains in advertising revenue and the performance of AWS.

In the realm of space exploration, Jeff Bezos' Blue Origin announced the successful orbiting of its New Glenn rocket, a significant milestone for the company. Future New Glenn missions are planned to carry cargo and crewed landers to the Moon as part of NASA’s Artemis program.

In the healthcare sector, Teladoc (NYSE:TDOC) Health has announced a partnership with Amazon to enhance access to its chronic condition programs through Amazon's Health Benefits Connector. This collaboration is expected to streamline the enrollment process and make Teladoc Health's programs more accessible to Amazon customers.

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