Investing Behind Strength

Morgan Stanley maintains an Overweight rating on Amazon, raising long-term EPS estimates despite an aggressive capex ramp for AWS and Project Kuiper. The firm highlights accelerating AWS growth and better-than-expected retail efficiency as core drivers for its $300 price target.

Key Takeaways

• 1.AWS is accelerating with faster-than-expected growth (raised '26/'27 revenue estimates by 3%/5%) driven by GenAI demand and capacity expansion.
• 2.Retail fulfillment efficiency is improving; underlying fulfillment cost per unit was 3% lower than expected in 4Q.
• 3.Capex is stepping up significantly for GenAI and LEO (satellite) investments, with '26/'27 forecasts raised by ~20% to over $200bn annually.

Table of Contents

• WHAT'S CHANGED
• Investing Behind Strength to Drive More Durable Growth
• We Raise AWS '26/'27 Revenue by 3%/5%
• Retail Fulfillment Efficiency Is Improving
• Agentic? Rufus Budding and AMZN Open for More Partnerships
• But to Be Clear, the Investment Is Stepping Up
• Raise '27 EPS by 4%, $300 PT
• One Last Note on AMZN's Severance Charge
• Exhibits
• Financials
• Risk Reward – Amazon.com Inc (AMZN.O) Top Pick
• Disclosure Section
• Analyst Certification

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