Unlike many other major technology companies, Amazon (NASDAQ: AMZN) has, so far, evaded the worst of the early October stock market sell-off, and the latest Wall Street rating revisions indicate the equity’s success is likely to grow larger in the next 12 months.
Specifically, Morgan Stanley (NYSE: MS) analyst Brian Nowak issued a ‘Buy’ recommendation for AMZN shares on October 19, while also raising his price target from $335 – 27.64% above the latest close at $262.45 – to $350, for a 33.36% predicted upside.
The Wall Street expert also reiterated his firm’s belief that the strength of Amazon Web Services (AWS) and its growth is ‘under-appreciated’ and will enable Jeff Bezos’ company to generate about $16.50 of 2028 earnings-per-share (EPS).
Morgan Stanley also named AMZN stock a top pick in the October 19 note.
Wall Street sets Amazon stock price target for the next 12 months
Zooming out, Nowak’s assessment of Amazon shares is only somewhat more bullish than the average attitude of his peers.
Indeed, AMZN equity is, overall, viewed as a ‘Strong Buy’ by Wall Street and boasts forty-two positive, two ‘Hold’, and no ‘Sell’ recommendations, per the data Finbold retrieved from TipRanks on Tuesday, October 20.
Similarly, the average 12-month stock price target is only slightly lower than what Morgan Stanley forecasted and anticipates Amazon to rally 25.92% to $330.49 by late 2027.
Amazon stock 2027 AI bear case
Elsewhere, the technology and e-commerce giant’s vast capital expenditures (CapEx) related to the artificial intelligence (AI) ‘boom’ and the alleged deficiencies in existing infrastructure could spoil Wall Street’s rosy outlook.
Specifically, Amazon appears to have purchased more GPUs for its AI data centers than it can use since, while it has space for additional racks, it lacks the energy needed to run them, per an October 19 Business Insider report.
The development lent additional credence to the notion that the hyperscalers have been buying more hardware from companies such as Nvidia (NASDAQ: NVDA) than they can use.
Considering the relatively short shelf life of GPUs – even the extended estimated useful life is only six years – and the unclear timeline for actual installation in Amazon’s case, there is a strong possibility that the blue-chip technology giant has wasted vast quantities of money for no gain.
Likewise, paired with earlier estimates that as much as 50% of Microsoft’s (NASDAQ: MSFT) may be in warehouses rather than data centers, Nvidia might soon begin struggling to find customers for its hardware between the alleged oversupply and previous overspending on the part of its biggest potential customers.
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