After an already strong price increase in 2024, an analyst believes that Amazon shares have further price potential.
• Amazon shares with strong price increases in 2024
• Bernstein raises price target from $235 to $265
• Increasing margins expected
Amazon investors enjoyed strong performance in 2024. Amazon shares ended the 2024 stock market year with a price increase of more than 44 percent, thereby performing better than the broader market. The S&P 500 only recorded a price increase of around 23 percent in the past trading year (as of: closing price on December 31, 2024).
Bernstein sees further price potential
Amazon shares are likely to continue to rise in 2025, at least the brokerage house Bernstein believes. The finance house’s experts still have a lot of confidence in the title, especially in the long term. With a price target raised from the original $235 to $265, Bernstein is one of the more optimistic Amazon analysts. The average price target of $249.62 determined on TipRanks is below Bernstein’s expectations, which even named Amazon the “best investment idea for 2025.”
Long-term growth
With their positive “outperform” rating, the experts are betting on further company growth. According to Investing, analysts expect particularly robust performance in the company’s core business, retail, AWS and advertising activities, which recently raised its EBIT estimate for 2026 to $99.6 billion, with improvements the cost efficiency was taken into account.
Amazon’s cost management initiatives, particularly its focus on reducing inbound fees and improving seller acceptance, are seen as margin-enhancing, the experts continued. Analysts’ expectations for operating margins are correspondingly optimistic, which Bernstein sees increasing to 11.4 percent by 2025. This development will be supported by increasing retail efficiencies and a strong forecast for AWS, while advertising revenue is expected to grow by around 20 percent annually due to high margins and scalability.
Magnificent Seven performer
Amazon is one of the so-called Magnificent Seven, the seven top stocks that support and drive the broad market. In addition to the Internet giant, Apple, NVIDIA, Alphabet, Meta, Tesla and Microsoft are also part of the illustrious group of stocks. In fact, Amazon shares performed comparatively “average” within this elite stock market club. While NVIDIA, Tesla and Meta were able to record significant gains, only Alphabet shares, Apple shares and Microsoft 2024 shares performed worse than Amazon shares.
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