Morgan Stanley analyst Brian Nowak maintained a Buy rating on Amazon today and set a price target of $300.00.
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New trading tool for AMZN bullsBrian Nowak has given his Buy rating due to a combination of factors that, in his view, position Amazon for sustained, above‑peer growth. He highlights that Amazon’s two core engines, AWS and Retail, are both scaling effectively, with cloud growth running ahead of prior expectations and retail revenue tracking solidly in line while becoming more efficient. He notes that management is intentionally leaning into higher capital spending—particularly in AWS and core retail infrastructure—to unlock new monetization avenues and reinforce multi‑year growth, and he believes the company’s historical record of generating attractive returns on invested capital supports this strategy. While the accelerated low‑Earth‑orbit (LEO) satellite build‑out introduces near‑term concern given its sizable spend and initially unclear return profile, he expects investor anxiety to ease as Amazon either secures tangible LEO contracts or delivers margin outperformance even after absorbing those costs.
Nowak also raises his medium‑term AWS revenue forecasts, pointing to the recent acceleration and his capex‑to‑revenue “yield” work as evidence that current investments should translate into even stronger cloud growth over 2026–2027, with further upside still possible. Despite this upgraded outlook, he argues that Amazon’s shares trade at a roughly 50% discount to large‑cap tech peers on a growth‑adjusted basis, creating a compelling risk‑reward skew. He lifts his 2027 EPS estimate even after baking in higher capex, depreciation, and LEO/Retail spending, reinforcing his view that scale and operating leverage will drive earnings higher. Finally, he emphasizes that the market underestimates Amazon’s positioning in generative AI—particularly via AWS—which, combined with his $300 price target that implies roughly 50% upside, underpins his Overweight/Buy recommendation.
In another report released today, Goldman Sachs also maintained a Buy rating on the stock with a $280.00 price target.