Morgan Stanley analyst Brad Erickson is bullish about Amazon’s (NASDAQ:AMZN) stock. He reiterated a Buy rating on April 8. The analyst expects the e-commerce and cloud computing giant to benefit from its focus on lowering costs, thereby boosting its profitability in the retail business. Thanks to Erickson’s endorsement, Amazon stock hit an all-time high of $187.29 before settling at $185.19.
Interestingly, Erickson is a five-star analyst who has an average return of 20.2% and a success rate of 65% on AMZN.
Erickson anticipates that AMZN will continue to enhance its fulfillment efficiency, reduce transportation distances and delivery times, and increase the use of robotics. Showing confidence in AMZN’s ability, the analyst increased his 2026 earnings before interest and taxes (EBIT) and free cash flow per share estimates.
Amazon’s Efforts to Reduce Costs
Notably, Amazon reshaped its fulfillment and transportation infrastructure and transitioned towards establishing eight regional hubs. These efforts have brought its transportation distances down and helped lower its cost-to-serve. In 2023, Amazon achieved a decrease in its global cost-to-serve per unit for the first time since 2018. This decrease in cost-to-serve enables the company to allocate resources to enhance delivery speed, expand product selection, and maintain lower average selling prices.
What is the Prediction for Amazon Stock?
Amazon continues to invest in artificial intelligence (AI) technology to drive profitability, accelerate growth, and strengthen its competitive positioning. Thanks to its efforts, AMZN stock is up over 81% in one year, outperforming the S&P 500’s (SPX) nearly 26.6% gain.
It’s worth noting that all 41 analysts providing recommendations on AMZN stock suggest buying it. The analysts’ average AMZN stock price target of $209.74 implies 13.26% upside potential.
