Amazon.com Inc. (AMZN) shares climbed as much as 5% on Monday following a bullish note from Morgan Stanley, which designated the e-commerce and cloud giant as a top stock pick and raised its price target from $335 to $350.

Led by analyst Brian Nowak, Morgan Stanley maintained an Overweight rating on the stock, indicating that the new $350 target presents roughly 40% upside from Friday's closing price of $250. The financial firm outlined a favorable 3:1 risk-reward profile, establishing a bear case scenario of $220 and a bull case of $410 per share.

Five Key Catalysts Driving Growth

The updated outlook is anchored by five primary growth drivers identified by the analyst:

  • Accelerated AWS Expansion: Morgan Stanley revised its revenue growth projections for Amazon Web Services (AWS) to 47% for 2027 and 42% for 2028. This upward revision follows Nvidia's disclosure that AWS anticipates purchasing and deploying approximately 2 million of its graphics processing units (GPUs) across those two years.
  • Expanded AWS Profit Margins: Operating margins for AWS are projected to reach 42% in 2027 and 44% in 2028, contributing to an estimated $16.50 in earnings per share by 2028.
  • Bedrock Visibility: Increased transparency regarding Amazon’s AI model service, Bedrock, is anticipated to enhance the stock's valuation multiple.
  • AI Shopping Integration: Nowak projects Amazon will capture market share as AI shopping agents proliferate, highlighting future partnership potential with Meta's Muse AI agent, with the upcoming holiday shopping season serving as an initial evaluation period.
  • Fulfillment Robotics: Efficiency gains from robotics-enabled fulfillment centers are forecasted to yield annual savings between $2 billion and $4 billion for every 10% of global units processed through automated systems, slated as a 2027 catalyst.

Prior to Monday's rally, Amazon stock had gained approximately 11% for the year, though it remained about 10% below its early August peak. The company is scheduled to release its third-quarter financial results after the market closes on October 29.