Morgan Stanley: AWS to Reach $1 Trillion in Revenue by 2035

Morgan Stanley's analysis of Amazon Web Services (AWS) growth potential has significant implications for investors. The firm projects that AWS computing capacity will expand from 14 GW in 2025 to 120 GW by 2035, driving revenue towards $1 trillion.

According to Morgan Stanley, if the monetization efficiency per incremental watt reaches $12, AWS could surpass $1 trillion in revenue by 2035. The current efficiency is approximately $8 per watt, based on full-year 2026 estimates.

Morgan Stanley's report also highlights the importance of AI business growth, which may follow a similar trajectory to core cloud services. The firm projects long-term EBIT margins for AWS at around 30%.

Given these projections, Morgan Stanley maintains an 'Overweight' rating on Amazon (AMZN.US), with a target price of $335 and approximately 27% upside from the current share price of around $262.