CNBC's Jim Cramer on Thursday commended Amazon's (AMZN) recent efforts to improve profitability, which have helped shares of the e-commerce and cloud-computing giant ascend more than 70% so far this year.
Cramer's comments on "Squawk on the Street" came in response to a research note from Morgan Stanley, which argued Amazon's stock could see additional upside between 20% and 60% in the coming years if its North American retail business continues to become more profitable.
"This is a note which is basically saying that management has figured out how to make a lot of money again ... on retail," said Cramer, whose Charitable Trust, the portfolio used by the CNBC Investing Club, owns Amazon. "It's a justification of the move more than it is, I think, another reason to buy it because it's been up a huge amount," Cramer added.
Amazon's stock closed at its highest levels of the year Wednesday, at $144.85 per share — though it's still below its all-time high of $186.57 per share, on July 8, 2021, as pandemic tailwinds lifted its business.
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After investing aggressively in the early part of the Covid pandemic to meet soaring demand, Amazon has worked to reign in costs in 2023 through layoffs and efficiency measures. Cramer has pushed Amazon to make those moves, and praised CEO Andy Jassy for his execution thus far.
"Jassy is back," Cramer said.
Nevertheless, Amazon's margins for its North American retail business still are below their pre-Covid levels, Morgan Stanley said in its note. But the analysts said lower shipping and fulfillment costs, disciplined spending on content for Prime Video, and better margins on Amazon's first-party merchandise are key levers the company can pull to get back there.
Here's a full list of the stocks in Jim's Charitable Trust, the portfolio used by the CNBC Investing Club.