Key Highlights
- Morgan Stanley elevates Amazon’s price target from $335 to $350, suggesting 40% growth potential.
- AMZN stock recovers approximately 2% following a 4.7% decline during the prior week.
- The firm projects AWS revenue expansion of 47% in 2027 and 42% in 2028.
- Warehouse robotics initiatives could generate between $2 billion and $4 billion in yearly cost reductions according to the bank’s projections.
- Analyst sentiment remains predominantly positive as Amazon approaches its October 29 quarterly results announcement.
Shares of Amazon (AMZN) advanced on Monday following an upgraded price target from Morgan Stanley, which highlighted accelerating cloud infrastructure expansion and emerging artificial intelligence applications. AMZN stock rose roughly 2% after closing at $250 on Friday.
Brian Nowak, the firm’s analyst, lifted his price objective to $350 from the previous $335 while reaffirming his Overweight rating. This revised target implies a 40% appreciation opportunity from Friday’s closing price. Morgan Stanley simultaneously designated Amazon among its preferred investment selections. The firm’s bear and bull scenarios establish share-price ranges at $220 and $410.
Cloud Services Revenue Projections Accelerate
Morgan Stanley anticipates Amazon Web Services will achieve 47% revenue expansion in 2027 and 42% growth in 2028. These figures exceed the bank’s earlier estimates of 41% and 37% for the same periods. The updated projections incorporate anticipated purchases of additional servers and data-centre infrastructure.
Nowak anticipates heightened demand for computational resources as enterprises construct AI-powered products. His analysis follows Nvidia’s estimate that AWS will implement approximately two million GPUs between 2027 and 2028. In related developments, Nvidia expanded its Nemotron AI models last week, introducing resources for developers engaged in AI work.
Amazon’s Bedrock platform contributes to the positive outlook. This service provides enterprises with AI model access for application development. Morgan Stanley projects AWS operating margins will climb to 42% in 2027.
Artificial Intelligence Shopping Tools Draw Industry Attention
Morgan Stanley anticipates Amazon will capitalize on AI-powered shopping tools designed to search for merchandise and execute tasks. Nowak emphasized the company’s distribution infrastructure and customer base.
Meta is simultaneously advancing AI capabilities. Recent analysis of Meta’s Muse Spark Open launch highlighted a framework for coding and task automation. Nowak suggested the holiday shopping season may serve as a proving ground for emerging consumer AI shopping assistants.
Warehouse Automation Expected to Reduce Operational Expenses
Warehouse automation represents another component of Morgan Stanley’s investment thesis. Amazon intends to establish additional robotic fulfilment centers and modernize current locations throughout 2027, according to the analyst’s assessment.
The bank calculates that routing an additional 10% of worldwide orders through automated facilities could yield $2 billion to $4 billion in annual savings. These projections assume widespread implementation of the technology across Amazon’s network.
AMZN Stock Recovers Ahead of Financial Results
Amazon shares rebounded after declining 4.7% during the previous week amid widespread selling in technology equities. Prior reporting on Amazon’s Friday stock decline documented the $250 closing price.
The stock continues trading approximately 12% beneath its August 3 closing level of $284.02. LSEG information indicates 62 of 64 analysts covering the company assign Buy or Strong Buy ratings. Amazon is scheduled to publish quarterly financial results on October 29.
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