Wall Street Bullish on Amazon’s AI-Driven Growth Trajectory

A prominent Wall Street firm is expressing strong confidence in Amazon.com Inc.’s future, citing significant upside potential driven by artificial intelligence investments. This optimistic outlook comes despite notable share sales by a major investor and the company’s own announcement of a massive capital expenditure plan.

Analyst Maintains Strong Buy Rating and $300 Price Target

Morgan Stanley analyst Brian Nowak reiterated his bullish stance on Wednesday, affirming an “Overweight” rating and a $300 price target for Amazon’s stock. This target suggests a potential gain of 46% from the recent closing price of $204.79. The core of Nowak’s argument is that the market is currently undervaluing the future returns from Amazon’s aggressive spending on AI infrastructure.

The analysis highlights Amazon Web Services (AWS) as a primary beneficiary. Morgan Stanley expects AWS to gain disproportionately from the expansion of data center capacity. Should these infrastructure investments yield normalized returns, AWS’s revenue growth could accelerate from the current 24% to over 35%. The firm also sees promise in Amazon’s retail segment, where AI tools like the “Rufus” shopping assistant are already contributing to increased merchandise volume.

Major Shareholder Berkshire Hathaway Significantly Reduces Stake

In a separate development, Berkshire Hathaway sold approximately 77% of its Amazon position during the fourth quarter of 2025, disposing of more than 7.7 million shares. This move is part of a broader portfolio adjustment by the conglomerate that began in late 2025 and does not appear to be solely triggered by a fundamental reassessment of Amazon’s value.

Should investors sell immediately? Or is it worth buying Amazon?

Concurrently, Douglas Herrington, CEO of Amazon’s Worldwide Amazon Stores, sold 4,784 shares on February 17 at an average price of $198.37. Importantly, this transaction was executed under a pre-arranged 10b5-1 trading plan established on November 10, 2025. Such automated sales plans are not typically indicative of an executive’s current market view. Herrington continues to hold over 512,000 Amazon shares.

Robust Business Performance Amidst $200 Billion Investment Plan

Amazon’s operational strength was demonstrated in its Q4 2025 results. Net sales increased by 14% year-over-year to $213.4 billion, surpassing expectations. AWS revenue grew to $35.6 billion, a signal that demand for cloud and AI services continues to outpace supply.

This supply-demand dynamic is a key justification, according to Morgan Stanley, for the substantial investment cycle unveiled by CEO Andy Jassy in early February. Jassy announced plans for roughly $200 billion in capital expenditures for 2026, with the majority earmarked for AI infrastructure, semiconductors, and data centers. While this level of spending is expected to pressure free cash flow in the near term, the firm believes it positions Amazon for superior long-term growth.