Amazon-Nvidia Collaboration Is Key To Amazon's Success in 2024: Analysts

Oppenheimer analyst Jason Helfstein reiterated an Outperform rating on Amazon.Com Inc AMZN and raised the price target from $170 to $200.

The re-rating reflected higher e-commerce margins, increased AWS multiple, and reiterated AMZN as his top large-cap pick for 2024. 

Also Read: Amazon's Cloud and AI Innovations Bolstered by Nvidia Partnership, Analyst Predicts Growth

The analyst expects e-commerce ex-ads margins to expand in FY24 and FY25 on fulfillment network efficiency. Consensus estimates imply no FY24 margin expansion ex-advertising. 

Helfstein increased his target AWS multiple as mature and high-growth software company valuations have increased from respective lows. 

Helfstein also mentioned analyst Tim Horan's positive takeaways from re: Invent, notably little grooming talk, Nvidia Corp NVDA partnership, Q (chatbot assistant), and upgrades to Zero-ETL. 

Helfstein projected Q4 revenue and EPS of $164.7 billion and $0.80.

Wedbush analyst Scott Devitt reiterated Amazon.com with an Outperform and a $180 price target.

This week, Amazon hosted its annual AWS re: Invent conference featuring new product announcements and five keynote sessions delivered by AWS executives, including AWS CEO Adam Selipsky. 

Devitt identified three primary objectives of Amazon's generative AI strategy. 

It provides a broad selection to clients by offering foundation models across leading partners and Amazon's own Titan family of models.

It enables frictionless and fast adoption of generative AI services by developing the tools to easily access, optimize, and use FMs with a customer's proprietary data. 

It also reduces costs and increases efficiency via AWS's proprietary chips optimized for training and inference and the latest from partners, including Nvidia.

Devitt projected Q4 revenue and EPS of $A165.9 billion and $0.86.

Morgan Stanley analyst Brian Nowak had an Overweight rating with a price target of $175.

For AWS, the following re: Invent announcements that attracted attention included the expanded Nvidia partnership with new GPUs and supercomputer deployment, guardrails to provide essential safeguards for LLMs, Q, Amazon's business assistant, and embedding vector capabilities across the data stack.

Price Action: AMZN shares are trading higher by 0.43% at $146.72 on the last check Friday.