UPDATE: Amazon's stock could soar 40% to reach Wedbush's new Street-high target

Shares of Amazon.com Inc. rallied 1.2% in premarket trade Monday, after Wedbush Securities analyst Michael Pachter boosted his stock price target to $1,250, which is now the highest among the 46 analysts surveyed by FactSet, citing expectations of continued "substantial earnings growth." Pachter's new target, up from $900, is 39% above Friday's closing price of $898.53. The stock traded at $909 ahead of the open, just below the April 5 record close of $909.28. "Amazon appears intent upon growing annual profits (with some quarterly volatility), which we expect to continue as the company invests in growth," Pachter wrote in a note to clients. "Amazon Web Services (AWS) should be the growth engine, with its gross and operating margins expanding rapidly." He said margin expansion could be tempered by spending on video content, fulfillment and international expansion. Separately, Goldman Sachs analyst Heath Terry raised his stock price target to $1,100 from $1,000, citing expectations of revenue acceleration. Amazon is scheduled to report first-quarter results after Thursday's closing bell. The stock has soared 20% year to date, while the S&P 500 has gained 4.9%.

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