Amazon is a multi-trillion dollar giant. Oppenheimer thinks it can get even bigger.

Amazon (NASDAQ:AMZN)’s market cap has surpassed $1.5 trillion as it has focused on cutting costs, upped its artificial intelligence game and may have turned the corner with its cloud unit, AWS.

And yet, Oppenheimer thinks there’s more room to run.

The firm is keeping Amazon (AMZN) as its top large-cap pick for 2024, despite the 70% run in the stock year-to-date, as it expects margins to rise in both e-commerce and its Amazon Web Services unit. The bank bumped its price target to $200 from $170.

E-commerce margins are set to expand as Amazon’s (AMZN) fulfillment network becomes more efficient. The bank is also targeting a multiple for AWS of 10 times 2024 revenue estimates, up from a prior 8 times, as high-growth software company valuations have jumped.

Amazon (AMZN) shares have roared this year, trouncing the return in both the S&P 500 and tech-heavy Nasdaq, as it has surpassed estimates for revenue and profit over the past three quarters. In its most recent earnings report out in October, Amazon (AMZN) generated $23.06B in revenue from AWS, up 12% year-over-year, and slightly below some analysts’ estimates.

However, Amazon (AMZN) Chief Executive Officer Andy Jassy said AWS sales stabilized in the third quarter and customers are optimizing workloads in a less certain economic environment by taking advantage of things like moving from hourly rates to year-long commitments, for example.

“While we still saw elevated cost optimization relative to a year ago, it’s continued to attenuate as more companies transition to deploying net new workloads,” Jassy said on the earnings call at the time. “There’s a lot of growth in front of AWS, I’m very optimistic about it.”

This year’s Cyber Week in November was its strongest ever, according to Oppenheimer, which noted that average spending data tracked by Adobe (ADBE), Salesforce (CRM) and Shopify (SHOP) showing an acceleration from last year.

Amazon (AMZN) has also been focused on driving margins higher with 2023 expected earnings before interest and taxes per corporate employee at $89,000 compared to 2022’s $33,000, Oppenheimer said.

Amazon’s (AMZN) massive strength and durability have been tested in recent years, amid rising interest rates, inflation and regulatory concerns, both at home and abroad.

Now, with inflation showing signs of cooling, and speculation creeping in about rate cuts, imagine what could happen in a favorable environment.

Amazon (AMZN) has 40 Strong Buy ratings, 13 Buys and one Hold from Wall Street analysts. The stock has four Strong Buys from Seeking Alpha analysts, 16 Buys, three Holds and one Sell. Seeking Alpha’s quant ratings rates Amazon (AMZN) a Hold.