Amazon Stock Has 30% Upside, According to 1 Wall Street Analyst. Is the Stock a Buy Near Its All-Time High?

With all the emphasis on artificial intelligence (AI) over the past year, it's easy to overlook how little changes to Amazon's (NASDAQ: AMZN) e-commerce business can have a big impact on its results. The company has been working to increase delivery speeds and decrease costs simultaneously.

One Wall Street analyst believes those efforts will ultimately pay dividends.

Delivering the goods

D.A. Davidson analyst Gil Luria maintained a buy rating on Amazon stock while reiterating his price target of $235. This represents a potential upside for investors of roughly 30%, compared to Wednesday's closing price.

The analyst notes that Amazon has been working with supply chain and logistics consulting firm MWPVL International to expand its delivery and fulfillment center network by roughly 45 million square feet, primarily in Arizona and California. Luria says these new delivery stations in the U.S. will better position Amazon to achieve its goals.

Back to basics

The analyst is on to something. On the conference call to discuss Amazon's fourth-quarter results, CFO Brian Olsavsky said the company was making "meaningful progress on delivery speeds in the United States and globally." He also noted that these improvements "led to increased purchase frequency" by Prime members, the company's most lucrative customers.

This leverage has contributed to increased profitability, as operating margins in Amazon's North American segment have cumulatively expanded by 800 basis points over the past seven quarters, climbing to 6.1%. Not only is Amazon increasing its sales, but it's keeping a greater percentage of every sale, dropping more profits to the bottom line.

Amazon gives investors exposure to e-commerce, cloud computing, digital advertising, generative AI, and more. And at less than 3x forward sales, it's a bargain. That's why the stock is a buy -- even near its all-time high.