Amazon Stock Price Forecast: Morgan Stanley Lifts Price Target to $350, Implies Over 30% Upside

TradingKey - As of the close on October 19 Eastern Time, Amazon (AMZN) closed at $262.45, up 4.98% for the day, hitting an intraday high of $263.72, with trading volume reaching 56.19 million shares, up from 40.43 million shares in the previous trading session. The driver behind Amazon's stock surge was that Morgan Stanley (MS) named Amazon a top pick and raised its price target from $335 to $350, which represents a potential upside of approximately 33% based on the latest closing price.

Morgan Stanley Bullish on AWS Growth, Lifts Amazon Price Target to $350

Morgan Stanley analyst Brian Nowak maintained an "Overweight" rating on Amazon and raised the price target from $335 to $350. The firm believes that the market has not yet fully priced in AWS's growth and profitability over the next two years and listed Amazon as one of its top picks.

Morgan Stanley currently expects AWS revenue to grow by 47% in 2027 and 42% in 2028, up from previous forecasts of 41% and 37%, respectively. This revision is partly based on Nvidia's disclosed supply plans, which project that Amazon will purchase and deploy approximately 2 million Nvidia GPUs over the next two years, expanding the scale of AI compute capacity AWS can provide.

Meanwhile, Morgan Stanley projects AWS's operating margin to reach approximately 42% in 2027 and climb further to 44% in 2028, while raising its 2028 earnings per share (EPS) forecast for Amazon to around $16.50. In addition, the firm cited the Bedrock AI platform, AI shopping agents, and warehouse robotics as potential growth drivers for the coming years. Its calculations show that for every additional 10% of global items Amazon processes through robot-automated fulfillment centers, it could save approximately $2 billion to $4 billion in annual costs.

However, higher demand for AI compute capacity also entails greater capital investment. Morgan Stanley estimates that Amazon's capital expenditure could reach approximately $355 billion in 2027 and $365 billion in 2028, respectively. Therefore, going forward, in addition to tracking AWS revenue growth, the market will also watch whether AI infrastructure investments can simultaneously translate into profits and free cash flow. Amazon is scheduled to report its third-quarter financial results after the U.S. market closes on October 29, when AWS growth rates and capital expenditure guidance will serve as key metrics to watch.

Amazon Stock Price Technical Analysis

Amazon daily stock chart, source: TradingView

Looking at Amazon's daily stock chart, Monday's gain of nearly 5% allowed the stock price to reclaim several moving averages. Meanwhile, the stock price broke through the October 12 high of $263.70, hitting a new two-month high of $263.72, which further strengthened short-term market bullish momentum and suggests the stock price is expected to continue rising in the short term.

To the upside, the primary resistance level to watch above is $267.56. If it can break through and hold above this level, the stock's next target will be testing the previous all-time high of $287.20. Holding above this level would open up upside room toward $300 or even $350.

To the downside, the primary support level to watch below is around $257, which is the 60-day moving average. If broken again, the stock price may test downward into the $249–$244 range. If it falls below $244, the stock price could further pull back toward around $226.