Bernstein analyst Mark Shmulik upgraded Amazon.com (AMZN) to Outperform from Market Perform with an unchanged price target of $3,400.

Recent work suggests that Amazon is positioned to increase its "dominant share position" when the return to physical stores occurs, Shmulik tells investors in a research note.

Further, Amazon has also "quietly made substantial inroads" into grocery and shopping verticals, adds the analyst. Amazon.com shares have sold off 16% in the last couple of weeks, creating an "attractive entry point," says Shmulik.

The analyst also believes the company is well positioned to benefit from the "permanent pull forward" in the hyper-scale cloud market.