Morgan Stanley Lifts Amazon Target to $350, Sees 33% Upside on AWS and AI
Updated
Updated · CNBC · Oct 20
Morgan Stanley Lifts Amazon Target to $350, Sees 33% Upside on AWS and AI
3 articles · Updated · CNBC · Oct 20
Summary
Morgan Stanley raised its Amazon price target to $350 from $335 and added the stock to its top picks list, arguing the recent pullback leaves 33% upside from Monday's close.
More than 7% below its Aug. 3 record after a 45% rebound from February lows, Amazon now needs next week's Oct. 29 earnings to prove AWS growth and AI spending can still drive the shares higher.
Five factors anchor the bullish call: stronger AWS revenue, better AWS margins, clearer Bedrock traction, evidence Amazon can monetize agentic AI, and signs robotics can become a meaningful earnings catalyst.
AWS remains the near-term focus because Morgan Stanley sees underappreciated profit potential, including high-40% incremental EBIT margins in 2027-28, if CEO Andy Jassy's long data-center life thesis holds.
Longer term, the bank says physical AI could reshape Amazon's cost base, citing prior estimates that each 10% of units routed through robotics-enabled fulfillment centers can save $2 billion to $4 billion annually.
With a staggering $220 billion capex for 2026, will Amazon's massive AI gamble pay off before power grid bottlenecks choke its cloud growth?
Could Amazon's model-agnostic AI strategy secretly be the ultimate masterstroke to dominate the cloud without winning the frontier model race?
If rapid hardware evolution accelerates, will Amazon's reliance on a five-year server lifespan turn its massive AI investments into a costly miscalculation?