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Amazon Shares Jump 4.4 Percent After Morgan Stanley Names It Top Pick

Shares rose from 250 dollars to 260.96 dollars as Morgan Stanley raised its target to 350 dollars, and Amazon launched a tool that lets its AI chips run PyTorch code without a rewrite.

By Orbit Post2 min read
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Amazon Shares Jump 4.4 Percent After Morgan Stanley Names It Top Pick

Key points

  • Amazon shares jumped 4.38 percent, rising to 260.96 dollars from a previous close of 250 dollars, in a move our markets watcher flagged on Tuesday.
  • Two things drove the move on Monday, October 19.
  • Cloud is now the engine of the company.

Amazon shares jumped 4.38 percent, rising to 260.96 dollars from a previous close of 250 dollars, in a move our markets watcher flagged on Tuesday. Reports on the session put the closing gain at about 5 percent to 262.45 dollars, with volume of more than 56 million shares. The Nasdaq Composite rose 1.11 percent the same day, so Amazon beat the wider market by nearly 4 points.

Two things drove the move on Monday, October 19. First, Morgan Stanley named Amazon a top pick and raised its price target to 350 dollars from 335 dollars. That target implies about 33 percent upside from the latest close. Second, Amazon launched TorchNeuron, a free and open source tool that lets its custom Trainium AI chips run code written in PyTorch, the most popular AI coding language, with a single configuration change and no rewrite. Reuters reported the launch and said shares were up 5 percent in morning trading, with Morgan Stanley naming Amazon a top pick. The Wall Street Journal also said shares bumped up nearly 5 percent after Morgan Stanley raised its price target.

Why investors cared

Cloud is now the engine of the company. Amazon Web Services revenue grew 36.7 percent in the second quarter to 42.2 billion dollars, its fastest pace in 18 quarters. The division produced 16.6 billion dollars in operating income, about 60 percent of Amazon's total. Morgan Stanley now expects AWS revenue to grow 47 percent in 2027 and 42 percent in 2028, up from earlier forecasts of 41 percent and 37 percent, in part because AWS plans to deploy about 2 million of Nvidia's GPUs over the next two years.

The chip tool matters because it goes after Nvidia's strongest defence, its Cuda software. Most AI developers write code in PyTorch, and Nvidia has spent more than a decade making that code run best on its chips. Amazon's Annapurna Labs unit told Reuters the goal is to meet customers where they are. More than 30 early customers are already using the new software, spanning robotics, world models and voice AI, and Amazon says switching to its chips can bring steep cost savings.

What comes next

The next test is Amazon's third quarter earnings on October 29. The stock still sits about 9 percent below its 52 week high of 287.20 dollars, so the new target would mean a fresh record if AWS keeps speeding up. The risk is the bill. Amazon has raised its 2026 capital spending plan to about 220 billion dollars for AI and cloud buildout, and free cash flow has turned negative. For now, investors are betting that fast cloud growth pays for that spending.

Sources