Morgan Stanley’s top analyst, Brian Nowak, stated in a research note that U.S. President Donald Trump’s “One Big Beautiful Bill” is expected to significantly boost the cash flows of tech giants Amazon (AMZN), Alphabet (GOOGL), and Meta (META). Importantly, Nowak noted that Amazon is poised to be the largest beneficiary among them, driving its dominance in the artificial intelligence (AI) world. The bill aims to provide immediate tax deductions on research & development and capital investments, offers incentives for domestic AI and tech development, extends permanent lower tax rates, and thus increases free cash flows (FCF).
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Nowak maintained his Buy rating on AMZN stock with a price target of $300, which implies 29.6% upside potential from current levels. He ranks #806 out of the 9,922 analysts tracked on TipRanks. Nowak has a 61% success rate and an average return per rating of 6.80%.
Amazon Is the Largest Beneficiary of the Bill
The Big Beautiful Bill is expected to bring major tax reforms, giving a sizeable cash boost to tech companies focused on the AI space. According to Nowak, the FCF of Amazon, Meta, and Google is expected to increase by 30%, 22%, and 5%, respectively, by 2026. This cash windfall could give the three companies more flexibility to gain an edge in the generative AI race.
Among them, Amazon is set to be the largest beneficiary of the bill because of its large investments in data centers, logistics, and R&D activities. Nowak projects that the bill could add $15 billion in Amazon’s FCF between 2025 and 2027. Additionally, the company could benefit from another $11 billion in 2028.
Notably, Nowak believes Amazon would reinvest a major part of these cash flows into its cloud services platform, Amazon Web Services (AWS), instead of passing them directly to shareholders. He stated that even if Amazon reinvests only 50% of the annual FCF into AWS, it could accelerate billions in automation savings for the company.
Nowak concluded by stating, “We see this more likely giving AMZN more flexibility to continue to invest and deepen its competitive moats and Generative AI offerings in retail (robotics, grocery, logistics, same day delivery, rural, etc.) and AWS (GPUs and other chips, power, infrastructure) … while also delivering more near-term FCF to investors.”
Which Is the Better Tech Stock According to Analysts?
We used the TipRanks Stock Comparison Tool to determine which stock is most favored by analysts. Currently, Wall Street has a “Strong Buy” consensus rating on all three stocks, with AMZN stock offering the highest upside potential in the next 12 months.
