Analysts at Morgan Stanley expect more growth for Amazon (AMZN) and its stock, even if the US stock market continues to slow. The firm’s analysts recently lowered their estimates for Amazon’s earnings and cloud services growth, as well as slashed its price target for AMZN shares. Despite this, the firm kept an “overweight” rating on the stock, signaling the company could quickly correct and improve the new stock forecast.
“Expect AMZN’s scale, buyer/seller advantages, logistics leadership and marketplace structure to enable the company to weather challenges better than most retailers,” analysts led by Brian Nowak said. Morgan Stanley lowered its 2025 and 2026 growth forecast for Amazon Web Services (AWS) by 1% and 2%, respectively, to 16% in both years and its 2026 earnings per share forecast for Amazon by 10% to $7.
For the U.S. e-commerce industry, Morgan Stanley now projects a 6% growth in 2025 and 2026, compared to its prior estimates of 7% for both years. According to its projections, Amazon’s market share should increase from 39% in 2024 to 40% this year and 41% in 2026.
Amazon (AMZN) has emerged as a top pick for traders, with the market looking like it may bounce back in the short term. Although there is still no shortage of macroeconomic factors holding prices at bay, the e-commerce juggernaut has some enticing avenues of future gains for a fledging market.
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One of these top avenues has been Amazon Web Services. According to Amazon CEO Andy Jassy, AWS has reached $108 billion in revenue, with its AI business boasting “triple-digit” growth. Indeed, the data shows the company is strong in what is likely its most promising sectors. “Generative AI is going to reinvent virtually every customer experience you know and enable altogether new ones about which we’ve only fantasized about,” Jassy wrote. Moreover, its AI endeavor will only strengthen its AWS cloud-computing business. Its integration should allow its lead in the market to grow stronger.
If it can continue to grow in those two sectors, things should look increasingly bright for the e-commerce juggernaut. Indeed, if the market rebounds, tech should be back to its winning ways. Moreover, in that industry, there may not be a stronger investment than in Amazon.