Morgan Stanley named Amazon (AMZN) stock a “Top Pick,” citing optimism about the e-commerce giant’s push into the fresh grocery market. Analyst Brian Nowak reiterated a Buy rating on Amazon stock with a price target of $300, indicating an attractive upside potential of about 30%. The 5-star analyst expects the company’s expansion into the fresh grocery/perishables space to unlock multi-year growth in its U.S. gross merchandise value (GMV).
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Morgan Stanley Is Optimistic About Amazon’s Fresh Grocery Expansion
Nowak explained that assuming the 2026 total U.S. spend (grocery/CPG spend) on off-premise food and beverage consumption reaches $1.6 trillion, he expects about $600 billion of this spend to be on fresh/perishables. This amount is roughly the same size as Amazon’s current total estimated 2026 U.S. GMV of about $570 billion.
Therefore, traction in this market could drive material growth on top of AMZN’s current U.S. grocery business of over $50 billion, which to date does not include fresh grocery/perishables. Nowak estimates that every 1% ($6 billion) of U.S. fresh/perishables spend that Amazon is able to capture would add about 120 basis points to his 2026 U.S. GMV growth estimate.
The top-rated analyst expects Amazon’s expansion into the fresh grocery space to be profitable and deliver EBIT (operating profit) dollar upside, given that the logistics network already exists, higher margins, and a minimum basket size of $25.
Furthermore, Nowak believes that in the longer term, capturing more consumer data (such as purchase behaviors and brand affinities) in the critical fresh grocery market will be vital for Amazon to “create next generation agentic grocery offerings.”
Is Amazon Stock a Buy, Hold, or Sell?
Wall Street is bullish on Amazon stock, given its dominant position in the e-commerce market and the massive growth opportunities for the Amazon Web Services (AWS) cloud business amid the artificial intelligence (AI) boom.
With 44 Buys and one Hold, Amazon stock scores a Strong Buy consensus rating. The average AMZN stock price target of $264.32 indicates 15% upside potential from current levels. AMZN stock is up 5% year-to-date.
