Amazon.com Inc. (NASDAQ:AMZN) is one of the Top 10 AI Stocks in the Spotlight 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 an AI winner. According to Morgan Stanley, AWS and Amazon Retail are underrated GenAI winners that could drive bigger profits.
AMZN is a Top Pick like AWS/Retail, both underrated GenAI winners. AWS looks set to accelerate further as capex performance framework shows how it could grow over 30% in ’26/’27. We also discuss why AMZN is a leveraged agent winner and why the partnerships would be positive/manageable.
The firm anticipates AWS revenue growth to exceed 30%, supported by a strong order book that reflects enduring business demand. However, one obstacle to AWS’s growth is that it is limited in part by data center capacity, which is why capital expenditures will be important for acceleration.
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Beyond the cloud, the firm highlighted Agent Commerce as another catalyst for AMZN. He believes 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 ~19 times our GAAP EPS of 27… for future EPS growth of ~20%. This is a 40% discount to peers on a PEG basis… as the name gets caught up in GenAI’s narrative crosscurrents and question marks around ROIC (return on invested capital) on its AI-related capex. That said, we remain optimistic despite this uncertainty and continue to think AMZN is the most underrated GenAI winner in our coverage.
Amazon.com Inc. (AMZN) is an American technology company that provides e-commerce, cloud computing, and other services, including digital streaming and artificial intelligence solutions.
While we recognize AMZN’s potential 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’s also benefiting significantly from Trump-era tariffs and the offshoring trend, check out our free report on best short-term AI stock.
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Disclosure: None. This article was originally published in privileged monkey.