Amazon.com Inc (NASDAQ:AMZN) shares are trading lower Monday, even as Morgan Stanley laid out a bullish long-term case for the stock and a prominent hedge fund manager dramatically increased his bet on the company.

Morgan Stanley Sees AWS Reaching $1 Trillion in Revenue

Morgan Stanley analyst Brian Nowak maintained an Overweight rating on Amazon with a $335 price target, framing the current AI infrastructure buildout as a high-return opportunity for major cloud providers. Nowak said Amazon’s second-quarter commentary reinforced his confidence that AWS could eventually generate $1 trillion in annual revenue, roughly six times its current run rate of about $170 billion, with long-term growth potential similar to what core AWS has delivered over the past two decades.

Nowak’s outlook centers on how quickly Amazon can bring new compute capacity online, which he views as the main driver of AWS’s future revenue growth as demand for generative AI tools continues to expand. Capacity additions of 6 to 8 gigawatts over 2026 and 2027 form the near-term base of his model, and he carries forward roughly 8 gigawatts annually beyond that as a working assumption, while cautioning that visibility fades the further out the forecast extends given uncertainty around hardware purchasing, power availability and how fast new data centers can actually get built.

The other lever in Nowak’s math is pricing power. The analyst pegs AWS’s current revenue generation at roughly $8 for every incremental watt of capacity this year, a figure he expects to climb over time. Should that number reach $12 per watt, his model puts AWS on pace to hit $1 trillion in annual revenue by 2035; at $14 to $15 per watt, that milestone could arrive a year sooner, in 2034.

Carrying similar profitability assumptions into AWS’s AI-driven business as its established cloud unit already commands, Nowak translated that trillion-dollar revenue figure into an estimated $300 billion of AWS operating profit, growing to roughly $500 billion company-wide once he layers in projections for Amazon’s retail operations.

Working backward from that profit estimate using a 21-times earnings multiple and a 10% discount rate, he arrived at a 2027 year-end share price near $500, representing close to 100% upside from where Amazon trades today.

Druckenmiller Boosts Amazon Stake

Stanley Druckenmiller’s Duquesne Family Office disclosed in a Friday 13F filing that it increased its Amazon position by more than 1,000% to 541,600 shares and more than doubled its call options on the stock. Despite the positive news, Amazon shares are under pressure alongside the broader market on Monday.

AMZN Shares Are Dipping

AMZN Price Action: Amazon.com shares were down 1.07% at $259.85 at the time of publication on Monday, according to Benzinga Pro.

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