Amazon’s dominance over multiple industries and markets will only get larger, according to one Wall Street firm.

Nomura Instinet reiterated its buy rating for Amazon shares, saying the internet giant will maintain its leadership position because of its massive investment spending.

“With nearly all retailers playing defense, the few willing & able to go on the offensive have been digging ever increasing moats to take ever increasing share,” analyst Simeon Siegel wrote in a note to clients Monday entitled “Analyzing the Forbidden: Margin Deep Dive Leaves
Us w/Increased Optimism.”

“To this end, we took a deep dive into Amazon’s margin structure, & backing into segment GMs [gross profit margins], we believe that mix shift alone could drive 1000+bps of LT GM lift, powering a $160bn investment into deepening Amazon’s moat.”

Amazon shares have rallied 51 percent this year through Friday, compared with the market’s 15 percent gain.

The analyst noted how the company’s profit margins are expanding as it grows its more profitable businesses such as cloud computing and the third-party marketplace seller platform. He estimates Amazon’s grow margin can potentially rise to 45 percent to 46 percent by 2022 from an estimated 35 percent this year, enabling up to $160 billion of incremental investment spending.

Siegel increased his price target for Amazon shares to $1,360 from $1,100, representing 20 percent upside to Friday’s close. The analyst’s new target is the second highest out of the 40 analysts who cover Amazon, according to FactSet.

Amazon shares were little changed on Monday after the report.