Amazon‘s stock gets $2,500 target from Morgan Stanley

Shares of Amazon Inc. are up 1.2% in premarket trading Wednesday after Morgan Stanley boosted its price target to $2,500 from $1,800. The new $2,500 target is higher than all targets listed on FactSet. "We have increasing confidence that Amazon‘s rapidly growing, increasingly large, high margin revenue streams (advertising, AWS, subscriptions) will drive higher profitability and continued upward estimate revisions," wrote Morgan Stanley analyst Brian Nowak. He also updated his "bull case" valuation for Amazon, which he now pegs at $3,150 a share. The bull case assumes a 25% compound annual growth rate for subscription revenue through 2022, 33% for the AWS cloud business, and 37% for "other" revenue, which mainly includes advertising. Shares are up 103% over the past 12 months, while the S&P 500 has gained 18%.

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