SEATTLE, August 18, 2026, 09:47 EDT — U.S. markets were trading.
- Morgan Stanley’s bull case at $500 suggests a potential 91.3% gain from Monday’s closing price.
- AWS needs to expand approximately 5.9-fold in order to achieve the stated $1 trillion revenue target.
- Amazon increases ad inventory with Prime Video releases, though the company does not reveal the service’s profitability.
For Amazon.com Inc. NASDAQ:AMZN to achieve the new $500 bull case, AWS revenue would have to increase by about 5.9 times. That growth target far exceeds the near-term impact of Prime Video’s recent success, Ride or Die.
Amazon finished Monday trading at $261.31. The stock was seen down 0.4% at $260.31 ahead of Tuesday’s session. Morgan Stanley’s $500 scenario suggests potential gains of 91.3%, with analyst Brian Nowak’s $335 base case pointing to a 28.2% increase.
The entertainment outlook is upbeat. Ride or Die has a 97% critics score and an 83% audience score. Amazon debuted all eight episodes on July 15. Octavia Spencer stars alongside Hannah Waddingham in the series.
| Prime Video signal | Verified measure | Investor relevance |
|---|---|---|
| Ride or Die debut | 8 episodes, July 15 | Additional viewing content |
| Critics score | 97% | Highly rated |
| Audience score | 83% | Favorable response |
| Prime Video ad-supported audience | 315 million monthly viewers | Worldwide advertising exposure |
Increased viewing may boost advertising and help retain Prime subscribers. However, Amazon does not disclose separate figures for Prime Video revenue, expenses, or operating income. As a result, investors are unable to directly connect the performance of a hit series to specific earnings.
The figures released show a different picture. Revenue from advertising services climbed 26% to $19.81 billion in the last quarter. Subscription-services revenue advanced 12% to $13.73 billion. AWS revenue was up 37% to reach $42.23 billion.
| Second-quarter engine | Revenue | Year-on-year growth | Share of Amazon sales |
|---|---|---|---|
| AWS | $42.23 billion | 37% | 21.1% |
| Advertising services | $19.81 billion | 26% | 9.9% |
| Subscription services | $13.73 billion | 12% | 6.8% |
| Total Amazon | $200.61 billion | 20% | 100% |
AWS accounted for 60.5% of Amazon’s operating income while representing 21.1% of total sales. The unit reported an operating margin of 39.4%. “AWS is booming, growing 36.7% year-over-year in Q2,” Chief Executive Andy Jassy said. Amazon earnings release
Nowak projects AWS to hit $1 trillion in yearly revenue in the next eight to 10 years. The company’s annualized run rate stands at $169 billion. Achieving that mark would require compounded growth of around 20% each year for a decade, a substantial challenge.
| AWS road to $1 trillion | Annual growth needed | Expected time frame |
|---|---|---|
| Optimistic scenario | 24.9% | 8 years |
| Base scenario | 21.9% | 9 years |
| Pessimistic scenario | 19.5% | 10 years |
Financial pressures are apparent. Amazon increased its projected capital spending for 2026 to $220 billion. Its trailing free cash flow moved from an $18.2 billion inflow to a $7.6 billion outflow—a decline of $25.8 billion.
| Analyst recommendation | Count | Share of 39 |
|---|---|---|
| Buy | 38 | 97.4% |
| Hold | 1 | 2.6% |
| Sell | 0 | 0% |
| Average target | $332.95 | 27.4% higher than Monday’s closing price |
| Target range | $250-$400 | -4.3% to +53.1% |
| Morgan Stanley base target | $335 | 28.2% expected gain |
The majority opinion is highly positive, with 38 buy recommendations out of 39 recent analyst ratings. However, the stated 12-month peak target stands at $400. The $500 level reflects a longer-term outlook rather than the present consensus.
Risks: The $500 scenario is dependent on sustained capacity, sufficient power resources and ongoing AI demand. Delays in data-centre builds or new regulations could push back returns. Popular Prime Video releases might boost engagement but may not counterbalance spending on content.
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