According to a Roth MKM Analyst, Amazon.com’s stock is expected to increase by 20% due to the company’s cost-cutting measures and AI implementation. Rohit Kulkarni has raised the price target for Amazon’s stock (AMZN) from $130 to $155 and maintained its Buy rating.
Kulkarni has also declared Amazon as the number one Mega Cap Internet pick, followed by Meta Platforms (META) and Alphabet (GOOGL). Kulkarni believes that all three Mega Cap companies are expected to benefit from the Gen AI wave.
Interest in Artificial Intelligence is growing, and it is becoming a significant factor for tech company shares. Nasdaq Composite, which has a high exposure to this technology, has increased by 28% in 2023. Amazon’s stock has soared by 53%, Microsoft (MSFT) has surged 38%, and Meta has jumped up by 134%.
Many Wall Street analysts share Kulkarni’s view of the future of AI, where it will have a positive effect on tech stocks. Thus, technology companies are expected to rise by another 12%-15% in the second half of 2021, stated Wedbush analyst Dan Ives in a recent research note.
Overall, Amazon’s efforts to streamline its operations using AI are expected to help boost the company’s profits. This move is good news for investors who are looking for long-term investments in companies with high growth potential.
Analysts Predict Broader Tech Rally for Amazon in 2023
As we move towards the second half of 2023, experts predict a larger technology rally for Amazon. The anticipated $800 billion artificial intelligence spending wave is a major factor in this shift. The ramifications of this event on the software, hardware, chip, and tech ecosystem over the next year are yet to be fully understood.
Amazon’s venture into artificial intelligence is not the only reason that Kulkarni is excited about their prospects. He notes that the Street is underestimating the potential leverage from cost-cutting measures, reductions in workforce, and logistics efficiency initiatives. Kulkarni views Amazon as a significant beneficiary of stable commodity inflation, stable global supply chains, and stable workforce compensation trends.
The analyst has since revised his revenue estimates for Amazon for the year. Kulkarni now anticipates that Amazon’s revenue in 2023 will reach $561.5 billion. This figure is higher than his prior estimate of $557.3 billion and Wall Street’s consensus of $560.2 billion according to FactSet.
While Amazon shares were down 1% on Monday, the future looks bright for the tech giant. Analysts and investors will be keeping a close eye on their progress as we approach the new year.