Amazon shares traded higher on Monday after Morgan Stanley named Amazon a top pick and raised the price target to $350 from $335. Amazon shares were up 2.08% at $255.19 at the time of publication, according to Benzinga Pro data.
Morgan Stanley analyst Brian Nowak maintained an Overweight rating on Amazon. Nowak's $350 price target is about 40% above Friday's $250.00 closing price. Nowak sees a 3-to-1 risk-reward ratio, with a $220 bear case and a $410 bull case. Nowak bases the price target on about 21 times Nowak's 2028 earnings per share estimate of roughly $16.50.
Nowak identified five catalysts: continued AWS growth, AWS margin beats, greater visibility into Bedrock, Amazon's role in agentic shopping, and robotics. Nowak now expects AWS revenue to grow 47% in 2027, up from 41%. Nowak now expects AWS revenue to grow 42% in 2028, up from 37%. The forecast increases followed Nvidia's indication that AWS expects to deploy 2 million GPUs in 2027 and 2028. Nowak wrote that the potential for AWS growth and profit remains underappreciated.
X-energy and American Electric Power announced a joint development agreement on Monday to advance feasibility work for a proposed 12-unit Xe-100 small modular reactor plant. The proposed plant would be near the former Breed Generating Station in Sullivan County, Indiana. The project would provide 960 MW of power. Amazon will provide development funding.
The project is the second commercial deployment under X-energy and Amazon's collaboration to bring more than 5 GW of new nuclear capacity to the U.S. grid by 2039. The Indiana project joins Energy Northwest's Cascade project in Washington State. Amazon vice president of data center infrastructure capacity delivery Josh Weissman said the partners aim to develop nearly a gigawatt of carbon-free power for the regional grid. Weissman said the partners intend to pay the full costs without passing the costs to others.
Amazon reports third-quarter results after the market closes on Oct. 29. Analysts estimate earnings per share of $1.96. Analysts estimate revenue of $202.21 billion. Amazon reported second-quarter earnings per share of $5.75, beating the consensus estimate of $1.82, with unrealized investment gains contributing. Amazon reported second-quarter revenue of $200.61 billion, beating the consensus estimate of $196.46 billion. Amazon guided to third-quarter net sales of $197 billion to $202 billion.
Amazon Stock Rises on Morgan Stanley Upgrade and AWS Growth Outlook
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Summary
Amazon shares climbed 2.08% to $255.19 on Monday, fueled by a Morgan Stanley upgrade and a $350 price target. The firm highlighted AWS growth, robotics, and margin beats as key drivers, raising 2027 and 2028 revenue forecasts. On-chain data shows renewed buying interest, with the fear and greed index trending higher. Amazon also announced a 960 MW nuclear project in Indiana and is set to report Q3 results on October 29, with $1.96 EPS and $202.21 billion revenue expected.
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