11:34 AM EDT, 05/01/2024 (MT Newswires) -- Amazon.com ( AMZN ) is positioned for upside from its retail margins and the acceleration of Amazon Web Services, or AWS, potentially driving multiple expansion, BofA Securities said in a Wednesday note.

The company reported Q1 earnings late Tuesday of $0.98 per diluted share, up from $0.31 a year earlier, as net sales rose to $143.3 billion from $127.4 billion. BofA Securities said AWS growth during the period topped market expectations, posting a record margin since its launch. The investment firm said the company's international and North American retail margins in Q1 also topped expectations.

The brokerage firm, however, noted that Amazon's ( AMZN ) Q2 guidance was "slightly underwhelming" as it points to decelerating revenue and lower profits sequentially. The investment firm attributed this to the leap-year benefit in Q1 and greater headwinds from foreign exchange.

"In our view, a major positive from the call was CEO commentary that margins can continue to expand while Amazon ( AMZN ) invests," BofA Securities said, noting that Amazon ( AMZN ) remains its "top large-cap pick."

BofA Securities reiterated its buy rating on Amazon ( AMZN ), with a higher price objective of $210 from $204 previously.

Price: 179.04, Change: +4.04, Percent Change: +2.31