Morgan Stanley Sees AWS Driven AMZN Reaching $500 by 2027

Morgan Stanley has maintained its 'Overweight' rating and $335 price target for Amazon (AMZN) stock, predicting it could hit $500 by the end of 2027. The firm believes this is achievable if Amazon Web Services (AWS) meets its revenue forecast.

AWS's Q2 revenue jumped 37% to $42.2 billion, marking its fastest growth in 18 quarters and reaching a $169 billion annualized run rate. AWS operating income surged 63% to $16.6 billion, accounting for about 60% of Amazon's total operating income.

Morgan Stanley believes that if AWS meets its revenue forecast, it could generate roughly $500 billion in earnings before interest and tax (EBIT) annually. The firm also predicts that AWS could eventually become a $1 trillion-a-year business, which would pave the way for Amazon stock to reach $500 by 2027.