Morgan Stanley Names Amazon a Top Pick With a $350 Target

Amazon (AMZN) picked up a big endorsement on Monday. Morgan Stanley raised its price target to $350 from $335, kept an Overweight rating, and promoted the stock to one of its Top Picks.

The new target implies about 40% upside from Friday's close, according to CNBC's report on the note. Shares gained a bit more than 1% in premarket trading.

Analyst Brian Nowak's argument starts with Amazon Web Services. He thinks investors underappreciate how much AWS drives both revenue and the stock, and that the market isn't giving it full credit.

The note's title spells out the pitch: Amazon to Top Pick with roughly 3:1 risk-reward and five catalysts ahead. Nowak points to three of those catalysts in particular.

First, the AWS numbers. Morgan Stanley expects AWS revenue to grow 47% year over year in 2027. The bank also sees more visibility for Bedrock, Amazon's managed AI service, helping fill that growth.

Second, agentic shopping, where AI assistants research and buy things for people. Nowak says Amazon is positioned as a winner, and the arrival of Meta's new Muse AI agent doesn't change that.

"AMZN is a key agentic enabler and winner, and that remains unchanged even through [the launch of Meta's personal AI agent] Muse." — Brian Nowak, Analyst, Morgan Stanley

Muse is worth a footnote. In a separate Monday note, Morgan Stanley said Muse is gaining about 300,000 new US downloads a day, but only about 20% of users are still around after 14 days. That's early evidence it hasn't scaled into a daily habit.

Third, robotics. Nowak says the pace of Amazon's robotics fulfillment center ramp through 2027, including new builds and retrofits, could show it's a winner in physical AI too.

That one is a longer-dated bet. Any payoff would show up gradually in fulfillment costs and delivery speed, not in next quarter's results, so it's the least urgent of the three catalysts.

The consensus view matters here as well. Of 64 analysts covering Amazon, 62 rate it Buy or Strong Buy, according to LSEG data cited by CNBC. A Top Pick designation from Morgan Stanley sharpens the call, but it isn't a contrarian one.

Shares are up a little more than 8% year to date, a modest gain next to the 40% upside Morgan Stanley sees from here. The bank is betting that gap closes as AWS growth accelerates.

Now the counterpoints. A 47% growth forecast for 2027 is a demanding number for a business of AWS's size, and it leans on AI demand holding up. CNBC's Monday coverage was dominated by worries over credit stress in the AI build-out.

Morgan Stanley's target also moved only about 4.5%, from $335 to $350. The bigger change is the Top Pick status and the argument that risk-reward is lopsided, not a sudden jump in valuation.

Valuation is the other piece. A $350 target means Morgan Stanley sees Amazon's stock rising well above where it trades today, and the bank is explicitly framing the setup as about three dollars of upside for every one of downside.

For investors, the watch list is clear. Look for AWS growth rates and Bedrock adoption in the next earnings report, any evidence that Amazon's shopping tools are winning in AI-driven buying, and how quickly robotic fulfillment spreads across its network.

If you already own Amazon, this is mostly a confirmation of the thesis, plus a reminder that the stock's fate is tied closely to its cloud business. If you're considering it, the key question is whether you believe AWS can keep accelerating, because that's what the 40% upside case rests on.

Bottom line: Morgan Stanley is betting AWS, agentic shopping and robotics outrun what the market now prices in, and it wants Amazon at the front of its list.