Morgan Stanley Names Amazon Top Pick, Lifts Price Target to $350 on AWS AI Growth

Morgan Stanley reiterated its "Overweight" rating on Amazon (AMZN) and named the stock its Top Pick, raising its price target to $350 from prior levels, roughly 33% above Monday's close of $262.45. Analyst Brian Nowak cited AI as the most overlooked growth driver, projecting AWS revenue could reach $1 trillion and eventually double the share price under a long-term scenario. Nowak expects AWS revenue to grow 47% in 2027 and 42% in 2028, accounting for higher Nvidia (NVDA) GPU shipments. With strong margins, the unit could qualify as a "Rule of 90" business, lifting 2028 earnings per share to about $16.50. He also flagged Bedrock, a potential Meta (META) partnership and robotics-driven savings of $2 billion to $4 billion annually per 10% of units processed through automated fulfillment centers. The doubling scenario remains longer-term and depends on GPU availability and AWS sustaining above-40% growth at scale. Amazon reported second-quarter fiscal 2026 revenue of $200.6 billion, up 20% year over year, and raised its 2026 cash capex plan to roughly $220 billion. Wall Street consensus stands at "Strong Buy" with a mean price target of $329.47.