Amazon (AMZN 2.29%) stock reached another 52-week high today on a bullish analyst note and as tech stocks rose broadly.
The key news item driving the stock higher was a bullish note on the stock from Roth MKM, which raised its price target from $165 to $180. It also maintained its buy rating and called the stock its top megacap pick for 2024.
The research firm said it expected internet industry tailwinds to be more muted in 2024, but Amazon is the only megacap stock for which it expects accelerating revenue and expanding operating margins.
As of 2:26 p.m. ET, Amazon stock was up 3% on the day, setting a new 52-week high of $154.53, nearly double its low almost a year ago.
Image source: Amazon.
Is Amazon still a buy?
Amazon stock has surged since its third-quarter earnings report at the end of October, as the company posted strong results in its third-quarter earnings report. Amazon saw excellent bottom-line and revenue growth in a challenging environment. The quarter showed that Andy Jassy's cost-cutting efforts have paid off.
Amazon also seems set to benefit from the improving macroeconomic environment, as the Federal Reserve recently forecast three interest rate cuts next year, which would encourage increased business and consumer spending, the key drivers of the Amazon Web Services cloud computing business, as well as the company's e-commerce empire.
The stock is likely to do well in a new bull market, and investors seem to be anticipating one, with the S&P 500 on the verge of a new all-time high. Amazon stock might look expensive on a typical price-to-earnings ratio basis, but the company's core businesses like its third-party e-commerce marketplace and AWS are highly profitable, meaning there's significant room for margins to expand as its cost-control efforts increase its operating leverage.
Given the improving macroeconomic picture and the company's ramping profits, Amazon stock still looks like a smart buy.
