Amazon stock pops after Morgan Stanley details 5 catalysts, lifts price target – USFTB

Amazon (AMZN) stock rose more than 3% in early trading on Monday after Morgan Stanley named it a top pick and raised its price target to $350 from $335, outlining five catalysts that could drive the stock higher.

The new target implies about 40% upside from Friday’s close of $250. With a bear case of $220 a share and a bull case of $410, the firm sees a 3:1 risk-reward ratio.

“In a market of see-sawing AI leaders and laggards, we detail 5 catalysts ahead to re-rate shares and drive material outperformance,” analyst Brian Nowak, who kept his Overweight rating, wrote in a note Sunday.

5 catalysts for Amazon

1. Faster AWS growth: Morgan Stanley now expects revenue at AWS, Amazon’s cloud unit, to grow 47% in 2027 and 42% in 2028, up from 41% and 37%. The change follows Nvidia’s (NVDA) disclosure that it expects AWS to buy and deploy about 2 million of its GPUs over those two years. The extra chips also lift the firm’s capital spending forecast for Amazon to $355 billion in 2027 and $365 billion in 2028.

2. Bigger AWS profits: Nowak expects AWS operating margins of 42% in 2027 and 44% in 2028, which supports about $16.50 in Amazon earnings per share in 2028.

3. Bedrock: More visibility into Bedrock, Amazon’s AI model service, could lift the stock’s valuation from about 15 times 2028 earnings, according to the note.

4. AI shopping: Nowak expects Amazon to emerge as a winner as AI shopping agents spread and expects it to partner over time with Meta’s (META) Muse AI agent. The holiday season is the first big test.

5. Robotics: Every 10% of Amazon’s global units that move through its robotics-enabled fulfillment centers could save $2 billion to $4 billion a year, Morgan Stanley estimates. The firm calls robotics a 2027 catalyst.

Amazon stock is up about 11% this year but sits roughly 10% below its early August high. Earlier this month, Yahoo Finance’s Brian Sozzi noted that Amazon was trading at one of its lowest trailing price-to-earnings ratios in years. Morgan Stanley’s $350 target is based on about 21 times its 2028 earnings estimate.

Amazon reports third quarter results on Oct. 29 after the bell.

Internal AI tools helped analyze interview transcripts, research, and draft this post. Humans reviewed, edited, and fact-checked this post before publication.

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