Analyst Jeffrey Lindsay upgraded Amazon to "Outperform" from "Market Perform," and raised his target price sharply to $160 from $125.

Lindsay expects the company's revenue growth to continue to reaccelerate through next year, driven by growth in the company's North American media business, expansion into high growth categories and "higher than average discretionary spending from the company's superior consumer demographics."

Amazon's customers, he said, lean heavily toward the highest household income categories, and online spending is "particularly high among these groups."

The analyst said the company's "unique and differentiated attributes have shown their value once again by enabling Amazon to reaccelerate revenues much sooner than expected coming out of the economic downturn."

Amazon's shares rose $5.59, or 4.6 percent, to close at $126.20.

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