Morgan Stanley Sees AMZN Stock at $500 by 2027 on AWS Revenue Boost

Morgan Stanley believes Amazon's stock could reach $500 by the end of 2027 if Amazon Web Services (AWS) meets its revenue forecast. The firm estimates that AWS could generate roughly $500 billion in earnings before interest and tax (EBIT) annually, which would be a significant contribution to Amazon's overall earnings.

AWS' Q2 revenue jumped 37% to $42.2 billion, marking its fastest growth in 18 quarters. AWS operating income surged 63% to $16.6 billion, accounting for about 60% of Amazon's total operating income.

Morgan Stanley maintained an 'Overweight' rating and a $335 price target for AMZN, implying a potential upside of about 28% from current levels.

Amazon raised its full-year spending forecast to $220 billion, with most of the money going toward AI and data centers. CEO Andy Jassy said AWS could eventually generate up to $1 trillion in annual revenue, with strong cash flow and investment returns.