Investment firm Oppenheimer raised Amazon’s stock price target to $930 on Tuesday, based on the strengthen of its cloud unit, Amazon Web Services.
Oppenheimer believes AWS is building on operating efficiencies that will allow it to continue dominating its competitors in the cloud market.
The company estimates AWS revenue will exceed $57 billion by 2023.
Oppenheimer is highlighting AWS because it believes the organization is building an incredibly efficient cloud model that will allow it to keep capital spending low even as it continues to grow its customer base.
"AWS' competitive advantages in procuring, designing and architecting datacenters and compute/storage resources are driving even higher profitability and lower capital intensity than previously expected," said Oppenheimer.
If this efficient cloud model grows as expected, Oppenheimer predicts AWS will have $5 billion in free cash flow within two years. By 2023, Oppenheimer estimates AWS will have $57.5 billion in revenue.
In April, Amazon smashed analysts' expectations, bringing in better-than-anticipated first quarter earnings driven primarily by the strength of AWS. In total, AWS was responsible for 56% of the entire company’s profit in Q1. AWS revenue was $2.57 billion, beating estimates of $2.53 billion. That’s up 64% from the first quarter of 2015.