Amazon.com, Inc. (AMZN) Named Top AI Pick as Morgan Stanley Sees AWS Acceleration and Agentic Upside

Core Viewpoint - Amazon.com Inc. is recognized as a leading AI stock, with Morgan Stanley reiterating an "Overweight" rating and a price target of $300, highlighting its potential as a top idea and AI winner [1][8]. Group 1: AWS and Retail Performance - Amazon's AWS and Retail segments are identified as underappreciated winners in the Generative AI (GenAI) space, with AWS expected to grow over 30% in 2026 and 2027 due to a strong backlog and durable enterprise demand [2]. - The growth of AWS is somewhat constrained by data center capacity, making capital expenditures crucial for its acceleration [2]. Group 2: Agentic Commerce and AI Partnerships - Beyond cloud services, Amazon's Agentic Commerce is seen as a catalyst for growth, with expectations of expanding horizontal AI partnerships and enhancing vertical leadership through its AI-powered shopping assistant, Rufus [3]. Group 3: Valuation and Market Position - Amazon currently trades at approximately 19 times its 2027 GAAP EPS, reflecting about 20% forward EPS growth, which is a 40% discount compared to peers on a PEG basis [4]. - Despite uncertainties surrounding the GenAI narrative and questions about return on invested capital (ROIC) related to AI capital expenditures, the outlook remains bullish for Amazon as a significantly under-appreciated GenAI winner [4].