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Why yet another analyst thinks Amazon could hit $1000 by next year

E-commerce growth overall is accelerating and retail giant Amazon.com could be its largest beneficiary, said Youssef Squali, Cantor Fitzgerald Global Head of Internet & Media Research and Managing Director, on Wednesday.

On Wednesday, Squali upgraded the e-commerce company to a "buy" and became the fifth analyst on Wall Street who currently predicts the company could hit $1,000 in the next year. His price target implies a gain of 20 percent from Tuesday's close.

"The call was really made on two assumptions," Squali told CNBC's "Squawk on the Street." "...The e-commerce growth in general is accelerating. We're noticing a tipping point in overall e-commerce."

He later added, "And because there is a ton of leverage in the model ... they were able to show margin leverage almost despite themselves.

Separately, Amazon launched a music streaming service called "Amazon Music Unlimited" on Wednesday with subscriptions as low as $3.99 a month for its Amazon Echo owners — a move that directly challenges services by Apple and Spotify.

Squali said that Amazon is in the process of building a big ecosystem and its streaming service is one additional step in that direction.

Amazon's stock was trading slightly higher in early afternoon trade Wednesday. The stock is up more than 23 percent year to date.

— CNBC's Giovanny Moreano and Reuters contributed to this report.