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Morgan Stanley Names Amazon Top Pick and Raises Target to $350

BullishHigh impact
AMZN$262.45 4.98%NVDA$217.09 1.38%

Shares of Amazon.com, Inc. (NASDAQ:AMZN) rose 5.33% to $263.30 following an updated analyst evaluation that named the company a top pick, maintained an Overweight rating, and increased the price target from $335 to $350. The higher valuation reflects updated growth estimates for Amazon Web Services as the cloud division prepares to deploy approximately 2 million artificial intelligence chips from NVIDIA Corporation (NASDAQ:NVDA) over the next two years.

The expanded hardware investment is expected to accelerate cloud revenue growth to 47% in 2027 and 42% in 2028, up from previous estimates of 41% and 37%. Projected operating margins of 42% in 2027 and 44% in 2028 are forecast to help support earnings per share of roughly $16.50 in 2028. Outside of cloud hosting, growth catalysts include Amazon's Bedrock AI service, expected integration with the Muse AI agent from Meta Platforms, Inc. (NASDAQ:META), and fulfillment automation. Operational estimates indicate that every 10% of global inventory shifted to robotics-enabled fulfillment centers could reduce costs by $2 billion to $4 billion annually.

Investors will be watching for initial performance indicators from AI shopping agent tools during the upcoming holiday retail season. Additionally, Amazon is scheduled to release its third-quarter financial results on October 29, which will offer further detail on capital expenditure plans and revenue performance.

Key points

  • Amazon.com, Inc. was named a top pick with its price target raised from $335 to $350 and an Overweight rating maintained, as shares rose 5.33% to $263.30.
  • AWS plans to deploy about 2 million NVIDIA GPUs over two years, lifting projected cloud revenue growth to 47% in 2027 and 42% in 2028.
  • Fulfillment center robotics could cut costs by $2 billion to $4 billion annually for every 10% of global inventory processed.
  • Amazon is scheduled to release its third-quarter financial results on October 29.

Written by our AI from expert market sources across the web. It can contain mistakes: check the facts before acting on them. Write-ups powered by the free AI API at FreeTheAI.org

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Questions and answers

What is the new price target for Amazon stock?

Analysts raised Amazon's price target from $335 to $350 while maintaining an Overweight rating. The analyst evaluation outlined a bull case scenario of $410 and a bear case scenario of $220.

Why were AWS revenue growth projections updated?

Cloud revenue growth estimates were increased to 47% in 2027 and 42% in 2028 following plans for AWS to deploy approximately 2 million NVIDIA GPUs across those two years.

When will Amazon report its third-quarter financial results?

Amazon is scheduled to release its third-quarter earnings report on October 29.