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AWS: the engine under the hood
Morgan Stanley is out here saying the $500 Amazon dream is less about shipping boxes and more about spinning up cloud compute. In other words: if Amazon is a giant retail mall with a side hustle in ads, AWS is the high-margin espresso machine in the back.
Why investors should care
That matters because AWS is still the bit of the company that can really stretch Amazon’s earnings power. If the firm’s thesis is right, AWS revenue has a long runway — so the market may keep rewarding Amazon like a cloud giant, not just a very large online store.
The market’s favorite guessing game
The takeaway for you: when analysts talk about Amazon’s upside, they’re really talking about whether AWS can keep compounding like a software business trapped inside a logistics empire. If that engine keeps humming, the stock gets a cleaner path to higher valuation multiples.
Big picture: Amazon may sell everything, but Wall Street still seems most excited about the one thing you can’t put in a Prime box: cloud growth.