Advertising checks for ad spending on Amazon.Com Inc (NASDAQ: AMZN) remain strong (Skai 4Q marketplace ad spending increased 48% Y/Y through Nov), BofA analyst Justin Post writes.
He expects Amazon's 2024 ad growth to be aided by new initiatives, including more ads in Prime Video and the ramp of new ad partnerships.
Ad revenue strength can potentially contribute to his margin upside thesis on the stock, as his analysis suggests advertising revenue will contribute 370 bps to FY23 North America (NA) margins.
BofA maintained a Buy rating on Amazon with a price target of $168.
In addition to retail efficiencies, the analyst sees potential for ad revenue upside to drive margin upside in 2024.
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