Morgan Stanley names Amazon a top pick and raises price target
Oct 20, 2026
Morgan Stanley named Amazon (NASDAQ: AMZN) a top pick on Monday, October 19, 2026, and raised its price target on the stock to $350 from $335, according to CNBC and Benzinga. Amazon shares closed 4.98% higher at $262.45 on the day.
What the analyst said
Morgan Stanley analyst Brian Nowak kept an Overweight rating on Amazon. According to Benzinga and CNBC, the note:
- raised expected revenue growth at Amazon Web Services (AWS) to 47% in 2027 and 42% in 2028, from 41% and 37% previously
- linked the higher estimates to disclosures by Nvidia indicating that AWS plans to buy and deploy about 2 million graphics processors over the two years
- set out five catalysts: AWS growth, AWS profit margins, more visibility into Amazon's Bedrock AI platform, Amazon's role in AI-assisted shopping, and robotics
- based the $350 target on about 21 times the analyst's 2028 earnings estimate, with a bear case of $220 and a bull case of $410
Analyst price targets are opinions about a possible future share price and may not be reached.
About AWS
Amazon Web Services rents computing power, storage and software to businesses over the internet. It is the largest provider of cloud infrastructure and a major source of Amazon's operating profit. Demand for computing capacity to train and run AI models has become an important factor in the cloud market, and investors follow AWS growth rates closely.
The market backdrop
The move came during a rebound in technology shares. On October 19, the Nasdaq Composite rose 1.11% to 26,430.89, after posting its worst week since June in the week to October 16. Chip stocks also recovered after several sessions of declines.
Upcoming results
Amazon is scheduled to report third-quarter results on October 29. Key items for investors are likely to include AWS revenue growth and margins, spending on data centres and AI infrastructure, retail sales and the company's outlook for the fourth quarter, which includes the holiday shopping season.
Amazon's other businesses
Besides AWS, Amazon operates one of the largest online retail businesses, a fast-growing advertising business, the Prime subscription service and streaming through Prime Video. Advertising and subscriptions have become larger sources of revenue in recent years. Analysts often look at how these businesses contribute to Amazon's overall profit alongside AWS.
How analyst notes work
Investment banks publish research notes with ratings such as Overweight, Equal-weight or Underweight, and price targets that reflect where an analyst expects a share to trade over a period, often 12 months. Notes can affect share prices in the short term, but different analysts often hold different views on the same company.
Other views
Not all analysts share the same view on Amazon. Ratings and price targets from different banks vary, and some analysts focus more on risks such as the cost of building data centres, competition in cloud computing from Microsoft and Google, and pressure on retail margins. Investors often look at a range of views rather than a single note.
Spending on AI infrastructure
Amazon, like other large technology companies, has increased its capital spending to build data centres and buy chips for AI. This spending can support future growth in AWS but also reduces free cash flow in the short term. The balance between investment and returns has been a recurring topic in recent weeks, as technology shares have moved sharply.
Risks and uncertainties
Analyst forecasts and price targets can change and may not be accurate. Amazon's results can be affected by competition, spending on infrastructure, consumer demand and regulation. Technology shares can be volatile, and a one-day move may not continue.
What this means for investors
For Investing.one users following AMZN, the analyst note and the upcoming results may be relevant. Past performance does not indicate future results.
Sources
- CNBC: Amazon is a top pick, says Morgan Stanley
- Benzinga: Amazon stock edges higher Monday
- Chartmill: S&P 500 top movers Oct 19
- Motley Fool: market midday Oct 19
This is not investment advice. Your capital is at risk. Past performance does not guarantee future returns.
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