Morgan Stanley has given Amazon an overweight rating and increased its price target from $335 to $350, suggesting a potential upside of 40% from the stock's recent closing price. Analyst Brian Nowak emphasized that investors may not fully recognize the importance of Amazon Web Services (AWS) in driving revenue growth, particularly as the company enhances its AI-focused cloud service, Bedrock.
He projects AWS will achieve a 47% year-over-year growth by 2027. Additionally, Nowak pointed out that Amazon is well-positioned to benefit from the rise of agentic artificial intelligence in shopping, leveraging its robust e-commerce infrastructure and loyal customer base. He also noted the potential for Amazon to excel in physical AI through its robotics fulfillment centers.
This positive outlook aligns with broader market sentiment, as 62 out of 64 analysts covering Amazon maintain a buy or strong buy rating, and the stock has already seen an 8% increase year to date