Morgan Stanley raises Amazon price target to $350 on AI cloud outlook
Morgan Stanley analysts have raised their price target for Amazon to $350 from $335, adding the stock to their top picks list. This move comes after Amazon shares dropped more than 7% from their August record high of $284, despite strong second-quarter results. The firm argues that Amazon's cloud business, AWS, is undervalued and that its strategy of focusing on AI infrastructure rather than…
Key points
- Morgan Stanley raised Amazon's price target to $350, implying 33% upside from Monday's close.
- Analysts project AWS operating margins in the high 40s% for 2027 and 2028.
- Amazon's Q3 earnings are scheduled for release after the closing bell on Oct. 29.
The bullish note outlines five key factors for future growth: strong AWS revenue, high operating margins, the strategic value of the Bedrock platform, success in agentic AI, and benefits from physical AI robotics. Morgan Stanley projects AWS could achieve high 40s% incremental EBIT margins in 2027 and 2028. They also highlight that Amazon's use of long-term hardware contracts and its model-agnostic approach to AI applications position it well to capture value from the ongoing AI infrastructure buildout.
Jim Cramer, who holds a buy rating on the stock, emphasized the importance of the upcoming Q3 earnings call on Oct. 29. He believes that if CEO Andy Jassy can demonstrate that AI investments are generating returns and that capital expenditure growth is moderating, the stock could see significant upside. The analysis suggests that while retail faces challenges with agentic shopping assistants, Amazon's logistics and cloud dominance provide a strong foundation for long-term value.
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What Amazon must do to get its stumbling stock back to record highs and beyond
CNBC Technology · 20 October 2026
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