Amazon shares may rise significantly in the next few years, mainly because of growth at Amazon Web Services, according to a new Morgan Stanley analysis.
On Monday, shares rose 1.3% in premarket trading, bouncing back after a small drop on Friday. The stock has gained a lot this year and over the past 12 months, but it is still a bit below its recent record closing high.
Morgan Stanley said on Sunday that if AWS grows its revenue to $1 trillion over the next ten years, Amazon could see earnings before interest and taxes reach about $500 billion. This would mean a big jump for the stock by the end of 2027 in the best-case scenario. The firm’s main forecast expects smaller gains from Friday’s closing price, but it also said the more optimistic outcome is looking more likely if AWS meets expectations.
Morgan Stanley said AWS would need to grow about 490% from its current yearly revenue of around $170 billion to reach $1 trillion. The firm also said that as demand for generative AI tools keeps rising, the main factor for future revenue growth will be how much each major cloud provider can expand its computing capacity.
Morgan Stanley estimated that Amazon has added about 8 gigawatts of computing capacity this year and expects similar growth in 2027. The firm said that turning this AI computing power into revenue will be key for AWS to reach $1 trillion.
Amazon recently increased its 2026 AI spending forecast to $220 billion, up from $200 billion, and has raised prices on AI server rentals twice this year. Morgan Stanley said that future profits will mostly depend on supply and demand, as well as compute pricing, which is influenced by new product developments.
The firm estimated that AWS now earns about $8 for each extra watt of computing power, but this could rise to about $12 per watt. If that happens, Morgan Stanley predicts AWS could reach $1 trillion in revenue by 2035 and could make about $300 billion in operating profit between 2034 and 2036.
AWS is still the main driver of Amazon’s business growth and stock performance. While Morgan Stanley’s most optimistic forecasts may seem bold, the AI-focused cloud computing market has shown it can deliver big gains when growth targets are reached.
