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Amazon (AMZN) has been one of tech's standout stocks this year — and one analyst thinks there may still be plenty of fuel left in the tank.
In a new note, JPMorgan analyst Doug Anmuth called Amazon stock his "best idea" and cited three under-the-radar advantages that could drive efficiency and margin expansion: regionalized logistics, robotics innovation, and a growing push into logistics as a service (LaaS).
The firm reiterated its Overweight rating and set a December 2025 price target of $240 per share, implying a more than 20% upside from current levels.
Amazon shares have surged in June, rising about 14% month to date and outpacing the S&P 500 (^GSPC). The rally comes as investors show optimism about the company's advertising and Amazon Web Services (AWS) cloud computing units. During Amazon's first quarter, AWS revenue grew 17% while ad revenue rose 19%. According to Yahoo Finance data, Amazon stock currently holds a Strong Buy consensus from more than two dozen analysts.
JPMorgan notes that Amazon has been quietly restructuring its massive fulfillment network, shifting from a national model to a regional one. That means customer orders are now more likely to be sourced and delivered from nearby warehouses, reducing shipping distance and costs.
This regionalization strategy helped Amazon deliver more than 9 billion same-day or next-day packages in 2024, per the note. The company's unit growth rose 8% year over year in Q1, outpacing its shipping costs, which increased 3%.
Amazon is planning to double its network of same-day fulfillment facilities — the least expensive buildings in its real estate footprint — which could cut delivery costs further. JPMorgan notes that there are currently about 600 small-package US delivery stations, but they could reach as many as 1,000.
AI and automation advancements could be another long-term cost saver. Potential technologies include generative AI for delivery mapping, enhanced demand forecasting, and advanced robots that could understand human language.
JPMorgan notes that Amazon's next-gen warehouses combine fulfillment, sortation, and last-mile delivery in one location, cutting processing time by up to 25% and lowering peak-season costs. Over time, Amazon is expected to retrofit its existing warehouses with these capabilities.
Beyond its own e-commerce business, Amazon is increasingly opening up its logistics infrastructure to third-party merchants. This logistics-as-a-service model could be a major revenue driver, similar to how AWS became a dominant platform by selling excess server capacity. The company already rivals the size of UPS in last-mile delivery.
