Cowen reiterated its outperform rating on Amazon shares due to the company's strong growth potential in the food category and the launch of its physical grocery store business.
Amazon revealed its first grocery convenience store test called "Amazon Go" for its employees Monday. It is slated to open to the public next year, according to The Seattle Times.
"We view Grocery as AMZN's biggest potential source of revenue upside over time with Go being another layer of AMZN's multi-platform Grocery strategy," analyst John Blackledge wrote in a note to clients Monday.
"Amazon Go utilizes a variety of advanced technology including computer vision, sensors and machine learning to revolutionize the in-store shopping experience. Customers scan their smartphone when they walk in, select the items they want and walk out without ever having to wait in line or check out."