Morgan Stanley names Amazon "Top Pick" amid AWS strength

Morgan Stanley analysts named Amazon their top pick on Monday and raised their price target to $350 from $335, maintaining an Overweight rating on the shares.

The firm said it sees approximately 40% upside potential to its $350 price target, with a 3-to-1 risk-reward ratio. The analysts pointed to AWS's revenue growth trajectory and its ability to operate as a "rule of 90" company, along with increased visibility for Bedrock's market position and Amazon retail's positioning in agentic commerce.

Morgan Stanley raised its AWS growth expectations, now forecasting 47% year-over-year growth in 2027 and 42% in 2028, citing higher Nvidia GPU shipments. The firm said its analysis suggests AWS can operate at high-40s percentage incremental EBIT margins in 2027 and 2028, which could help Amazon generate approximately $16.50 in earnings per share for 2028.

The analysts identified five catalysts for the stock, including AWS's path toward $1 trillion in revenue, the strength of Amazon's Bedrock platform during the inference phase of AI adoption, and the company's position in agentic commerce. Morgan Stanley also highlighted Amazon's robotics deployment, noting that management plans to more than double its fleet of robotic arms in 2026.

Amazon shares traded more than 4.3% higher on Monday.