Buy Amazon Stock: Raymond James Analyst

Tickers in this article: AMZN

NEW YORK (TheStreet) - Amazon surged as much as 10.8% on Friday following strong revenue growth in the third quarter and increasing analyst optimism on the stock.

Raymond James analyst Aaron Kessler increased his rating on the online retailing giant to "strong buy" from "market perform" on Friday.

Kessler believes the company still has "revenue momentum with accelerating growth in the U.S.," particularly since the company noted "millions of new prime subscribers" were added last quarter; strong [Amazon Web Services] growth of approximately 77% this year and an expectation of improving margins next year and beyond from larger more automated warehouses and improving international margins, he wrote in a note on Friday.

"Ultimately we believe long-term non-GAAP operating margins can reach [approximately] 10%," the note said. "We believe shares offer an attractive risk/reward at current levels."

Amazon reported late Thursday a third-quarter loss of 9 cents a share on $17.09 billion in revenue, up 24% year over year. Consensus estimates had expected Amazon to post  9-cent loss on softer revenue, averaging at $16.76 billion, according to Thomson Reuters.

Shares were surging 7.9% to $358.62 at last check on volume of 8.3 million shares, more than triple its average daily trading volume.

-- Written by Laurie Kulikowski in New York.