Amazon.com Inc. (NASDAQ:AMZN) is one the Top 10 AI Stocks in Focus on Wall Street. On February 18, Morgan Stanley reiterated the stock as “Overweight” with a $300 price target, stating that Amazon remains a top idea and AI winner. According to Morgan Stanley, Amazon’s AWS and Retail are both underappreciated GenAI winners that could drive further upside.
AMZN is Top Pick as AWS/Retail both under-appreciated GenAI winners. AWS seems set to further accelerate as capex yield framework shows how it could grow 30%+ in ’26/’27. We also discuss why AMZN is an agentic winner with leverage and why partnerships would be positive/ manageable
The firm anticipates AWS revenue growth to exceed 30%, supported by a strong backlog that reflects durable enterprise demand. However, one bottleneck for AWS growth is that it is partly constrained by data center capacity, which is why capital expenditures will be important for acceleration.
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Beyond cloud, the firm highlighted Agentic Commerce as another catalyst for AMZN. It believes how AMZN is likely to expand horizontal AI partnerships and also strengthen its vertical leadership through its AI-powered shopping assistant, Rufus.
AMZN now trades at ~19X our ’27 GAAP EPS…for ~20% forward EPS growth. This is a 40% discount to peers on a PEG basis…as the name is caught in GenAI narrative cross currents and question marks around ROIC [return on invested capital] on its AI-related capex. That said, we remain bullish through this uncertainty and continue to think AMZN is the most under-appreciated GenAI winner of our coverage.
Amazon.com Inc. (AMZN) is an American technology company offering e-commerce, cloud computing, and other services, including digital streaming and artificial intelligence solutions.
While we acknowledge the potential of AMZN as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.