AMZN Stock Rises as Morgan Stanley Sees 40% Upside

TLDR

Table of Contents

Morgan Stanley raises its Amazon price target to $350, indicating 40% potential upside.
AMZN stock gains around 2% after falling 4.7% during the previous week.
Morgan Stanley forecasts AWS revenue growth of 47% in 2027 and 42% in 2028.
Amazon’s robotics operations could deliver annual savings of $2 billion to $4 billion under the bank’s scenario.
Wall Street analysts remain largely bullish as Amazon prepares to report quarterly earnings on October 29.

Amazon (AMZN) shares climbed on Monday after Morgan Stanley raised its price target, citing stronger cloud growth and new uses for artificial intelligence. AMZN stock gained about 2% after ending Friday at $250.

Amazon.com, Inc., AMZN

Analyst Brian Nowak increased his target to $350 from $335 and maintained an Overweight rating. The new target represents 40% upside from Friday’s close. Morgan Stanley also named Amazon a top pick. Its lower and upper share-price scenarios stand at $220 and $410.

AWS Growth Forecast Rises

Morgan Stanley expects Amazon Web Services revenue to grow 47% in 2027 and 42% in 2028. The bank previously projected growth of 41% and 37%, respectively. The forecasts account for purchases of new servers and data-centre equipment.

Nowak expects greater demand for computing power as companies build AI products. His forecast follows Nvidia’s projection that AWS will deploy about two million GPUs over 2027 and 2028. Separately, Nvidia expanded its Nemotron AI models last week, adding tools for developers working with AI.

Amazon’s Bedrock service also forms part of the outlook. It gives businesses access to AI models for developing applications. Morgan Stanley expects AWS operating margins to reach 42% in 2027.

AI Shopping Faces New Competition

Morgan Stanley also expects Amazon to benefit from shopping tools that use AI to search for products and complete tasks. Nowak pointed to its delivery network and customer relationships.

Meta is also developing AI tools. Recent coverage of Meta’s Muse Spark Open launch described a model for coding and automated tasks. Nowak said holiday shopping could test new consumer AI shopping agents.

Robotics Could Lower Delivery Costs

Warehouse automation forms another part of Morgan Stanley’s forecast. Amazon plans additional robotic fulfilment facilities and upgrades to existing sites during 2027, according to the analyst’s report.

The bank estimates that moving another 10% of global orders through robotic facilities could save $2 billion to $4 billion annually. Those savings depend on how widely Amazon adopts the technology.

AMZN Stock Rebounds Before Earnings

Amazon shares gained after losing 4.7% last week amid a broader technology sell-off. Earlier coverage of Amazon’s Friday stock decline recorded a close of $250.

The shares remain about 12% below their August 3 closing price of $284.02. LSEG data show 62 of 64 covering analysts rate the stock Buy or Strong Buy. Amazon plans to release quarterly earnings on October 29.

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