Amazon shares jump as Morgan Stanley calls AWS runway “under-appreciated”

Amazon.com Inc (NASDAQ:AMZN) shares rose more than 5% on Monday after Morgan Stanley (NYSE:MS) named the company a top pick and raised its price target to $350 from $335.

The firm sees roughly 40% upside as Amazon Web Services accelerates, and now models AWS growth of 47% in 2027, up from 41%. It projects 47% and 42% year-over-year growth through 2027 and 2028.

Morgan Stanley expects AWS to operate as a “rule of 90” company in 2027 and 2028, with operating margins of 42% to 44%. That would pave the way for Amazon to generate about $16.50 of earnings per share in 2028, the analyst said, a figure derived from 21 times earnings.

“We continue to think AWS’s growth and profit runway is under-appreciated,” analysts wrote.

The firm outlined five catalysts for the stock. These include AWS growth re-accelerating to…