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Amazon's cloud platform to drive its margin growth in 1Q, says Wedbush analyst

Michael Pachter maintains a US$1,750 price target on its stock as well as an Outperform rating

An Amazon.com warehouse
Amazon's ads should also push of its margin growth

The "impressive" growth in subscriptions from Amazon.com Inc (NASDAQ:AMZN)'s Prime business will drive the online retailer's first-quarter earnings which are set to be announced on Thursday, according to Michael Pachter, an analyst with Wedbush Securities who has a US$1,750 price target on the stock and an Outperform rating.

Pachter also argues in a note, which was obtained first by TheFly.com, a business news portal, that Amazon web services – the company’s cloud platform; its fulfillment unit – which handles business from third-party retailers; and its ads should push up Amazon.com’s margin growth in the first quarter, while its Prime unit, which offers access via subscriptions to streaming videos and movies, will be the engine behind its retail revenue growth.

READ: Amazon's price target is raised to US$1,800 by Credit Suisse analyst

This month, Amazon.com CEO Jeff Bezos announced in a letter to shareholders that the company has exceeded 100 million Prime subscribers worldwide.

The Seattle-based company said it added more Prime members this year than in previous years and shipped more than 5 billion items to subscribers.

In morning trade, Amazon.com inched up to US$1,540.92

Quick facts: Amazon.com, Inc.

Price: 1906.59 USD

NASDAQ:AMZN
Market: NASDAQ
Market Cap: $949.12 billion
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