What Happened?
Shares of cloud computing and online retail behemoth Amazon (NASDAQ:AMZN) jumped 3.3% in the morning session after Morgan Stanley named the company a top pick and raised its price target to $350 from $335.
Morgan Stanley analyst Brian Nowak maintained an Overweight rating and lifted his target by $15, outlining a three-to-one risk-reward profile and roughly 40% implied upside from Friday's $250 close, in research reported by CNBC. In a note to clients, Nowak argued that Wall Street underappreciates the operating runway for Amazon Web Services, projecting cloud revenue growth will accelerate to 47% in 2027 as enterprise adoption of its Bedrock artificial intelligence platform broadens. Per CNBC, Nowak outlined five catalysts supporting the call, emphasizing Amazon's positioning in agentic commerce and compounding margin gains as robotics deployment ramps across its fulfillment centers.
The early advance also coincided with a wider technology rebound, with Nasdaq advancing more than 1% in pre market trading following steep sector-wide declines the prior week.
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What Is The Market Telling Us
Amazon’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock gained 14% on the news that the company reported second-quarter results that topped market expectations, driven by a significant beat in its cloud computing division.
Amazon's revenue grew 19.6% year-over-year to $200.6 billion, surpassing analyst estimates. Its GAAP earnings per share of $5.75 also significantly beat expectations, although this figure was boosted by a large one-time, non-operating income of $53.4 billion from the company's investment in Anthropic, an AI company. The key driver for investor optimism was Amazon Web Services (AWS), which grew 37% year-over-year, outperforming expectations for 31% growth. However, the company's revenue guidance for the upcoming quarter came in slightly below analysts' forecasts. Despite the mixed outlook, investors focused on the strong current performance, particularly in the high-margin AWS segment.
Amazon is up 14.8% since the beginning of the year, and at $260.07 per share, it is trading close to its 52-week high of $284.02 from August 2026. Investors who bought $1,000 worth of Amazon’s shares 5 years ago would now be looking at an investment worth $1,510.
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