This Magnificent Warren Buffett Stock Has Rocketed Up Over 80% and Could Keep Climbing, According to Wall Street

At the end of last September, Warren Buffett’s holding company Berkshire Hathaway controlled an even 10 million shares of Amazon (NASDAQ: AMZN). It isn’t a top holding, but at a recent value of around $1.6 billion, it’s more than just pocket change.

Buffett probably wishes he had acquired more shares of Amazon when it dipped in early 2023. The stock has soared about 75% from the low point it hit last March.

Despite being way up already, analysts on Wall Street think it has more fuel in the tank. The consensus price target on Amazon suggests it can climb another 15% over the next 12 months.

Before rushing out to buy this or any stock based on encouraging estimates, there’s something investors need to understand. The investment bank analysts who set attention-getting price targets can quietly adjust those targets downwards if things don’t work out as hoped. Repairing the damage following a misguided estimate can cause to your portfolio’s performance isn’t so easy.

Here’s a closer look at Amazon in light of recent developments to see if it’s a smart stock to buy now.

Amazon swings back to profitability

Overinvestment during the early phase of the COVID-19 pandemic led to steep losses for Amazon in 2022. Long-term investors who confidently held the stock through the volatile period are being rewarded.

Wall Street analysts keep raising their price targets on Amazon because profits are back in a big way. Operations generated $36.8 billion in free cash flow last year, compared to an $11.6 billion outflow in 2022.

On the top line, Amazon was able to report total revenue that rose 12% year over year, thanks to double-digit percentage gains from all three of its operating segments.

Growth appears to be accelerating. Fourth-quarter sales rose 14% year over year, due in part to a record-breaking holiday shopping season.

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