Amazon has a "monster hit" on its hands with its artificial intelligence personal assistant Alexa, and it's only going to get better, RBC Capital Markets analyst Mark Mahaney told CNBC on Wednesday.
Alexa, which is already built into the Echo speaker, is now going to be built directly into certain TV sets, along with the rest of Amazon's Fire TV software. The e-commerce giant is also working with Whirlpool to develop voice-enabled smart appliances.
While those smart appliances may work for just a small percentage of households today, it is "big deal" that people can do basic things like play music, and order from a store through voice commands instead of leaving the home or logging onto a PC, Mahaney said.
"This will take a while for consumers to change their patterns but this ... we think it's the Trojan horse for Amazon, frankly, into the refrigerator," he told "Power Lunch."
For now, it's also helping drive revenue for the company. Manahey said his firm's survey data shows that about a quarter of people who have the Echo devices end up purchasing more from Amazon.
"That's kind of the long-term win here for Amazon. It's a customer acquisition tool but really it's a customer retention tool and a chance for people to more easily remove the friction, purchase more from Amazon," he said.
Mahaney has a $950 price target on the stock. Amazon closed slightly higher on Wednesday at $757.18.
— CNBC's Gino Siniscalchi contributed to this report.
Disclosures: RBC Capital markets is currently providing Amazon.com with nonsecurities services.