Amazon.com (NASDAQ:AMZN), a global e-commerce, cloud computing, and digital advertising platform, closed at $262.45, up 4.98%. Morgan Stanley's top-pick call and higher price target lifted shares, and investors are watching Amazon Web Services (AWS) growth in the company's October 29 earnings report.
Trading volume reached 54.5 million shares, coming in about 4% above its three-month average of 38.9 million shares. Amazon.com IPO'd in 1997 and has grown 263,927% since going public.
How the markets moved today
The S&P 500 (SNPINDEX: ^GSPC) closed at 7,691, up 0.42%, and the Nasdaq Composite (NASDAQINDEX: ^IXIC) closed at 26,431, up 1.11%. Within internet retail, cloud computing, digital advertising, and logistics services, Walmart (NASDAQ:WMT) closed at $118.70, down 0.09%, while Microsoft (NASDAQ:MSFT) closed at $533.52, up 0.84%, underscoring mixed trading as cloud scrutiny and AI spending stay in focus.
What this means for investors
On Monday, Oct. 19, Morgan Stanley named Amazon a top pick, kept an Overweight rating, and lifted its target to $350 from $335. A key driver behind the increase in its share price target is the artificial intelligence boom.
Morgan Stanley noted five key catalysts for Amazon's stock, including AWS growth nearly tripling from 2025 to 2028 as customers increasingly adopt AI. Other catalysts are greater AWS profits, Amazon's Bedrock AI platform, AI-powered shopping, and robotics.
AWS delivered impressive results for Amazon in the second quarter. Revenue rose 37% year over year to $42.2 billion, representing the fastest growth in 18 quarters. Wall Street investors will be expecting another quarter of strong performance when Amazon reports Q3 2026 earnings on October 29, although litigation and regulatory risk remain a longer-term overhang on valuation.
Two weeks ago, a UK competition watchdog stated AWS and Microsoft should do more to address barriers to switching cloud providers, a reminder that regulation can affect margins.
Robert Izquierdo has positions in Amazon, Microsoft, and Walmart. The Motley Fool has positions in and recommends Amazon, Microsoft, and Walmart. The Motley Fool has a disclosure policy.