Amazon Stock: Morgan Stanley and UBS Raise Price Targets Ahead of Q3 Results on 29 October, but What Do AWS Margins, Capex and Risks Say?

This is a US-listed share quoted in dollars, so Indian readers should also consider exchange-rate moves and the rules and charges for investing overseas. This article looks at what Morgan Stanley and UBS said, what the market expects from the Q3 results, what the AWS margin debate means for Amazon stock and which risks could change the picture.

I could not retrieve the full UBS and Morgan Stanley notes, the rating attached to the Morgan Stanley target, or the live Amazon stock price on 27 Oct, so the price is the 26 Oct Nasdaq close. Capex figures differ between reports and I show both. It is educational and not advice.

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Amazon Stock: Price Targets From Morgan Stanley and UBS

Amazon stock: broker	New target	Previous and date	Upside from USD 249.09 (my calculation)
UBS (Stephen Ju), Buy	USD 348	USD 318; 26 Oct 2026	About 39.7%
Morgan Stanley	USD 350	USD 335; 20 Oct 2026; rating not stated in the source	About 40.5%
Koyfin average of analysts	USD 331.72	Range USD 230 to USD 405; 42 of 60 rate Buy and 16 Strong Buy	About 33.2%

The UBS Amazon price target rests on 18 times its revised 2027 earnings per share, and the Morgan Stanley Amazon price target rests on AWS growth and profitability rather than retail sales alone (as reported). The Amazon stock price had been higher a week earlier, at a close of USD 262.37 on 21 Oct, so the share has fallen about 5.1% since then (my calculation) even as targets were raised. The 52-week range is USD 196.00 to USD 287.20 and the market value is about USD 2.7 trillion.

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The AWS Margin Debate Behind Amazon Stock

Amazon stock: AWS item	Reading	Source
Q2 AWS revenue	USD 42.23 billion, up 37%	Company results as reported
Q2 AWS operating margin	About 39.4%	Pepperstone preview
UBS 2027 AWS margin	46%, against a consensus of 38%	UBS via StockTwits
UBS AWS revenue add	About USD 80 billion of incremental revenue and USD 20 billion of added depreciation	UBS via StockTwits
Q3 AWS growth expected	About 35%, down from 37%	Pepperstone preview

UBS argues that the Street's AWS margin for 2027 is too low and says Amazon would need about USD 29 billion of extra SG&A to keep its operating margin near the Q2 level of about 39% (as reported). If the AWS margin stays high while growth continues, earnings could beat estimates. If depreciation from the large data centre build-out rises faster than revenue, the margin could disappoint.

What to Expect From Amazon Stock on Q3 Results Day

Amazon stock: Q3 2026 item	Guidance or consensus	Year-ago or note
Results date	Thursday, 29 Oct 2026 after US close; call at 5:00 PM ET	About 2:30 AM IST on 30 Oct (my calculation)
Net sales guidance	USD 197 billion to USD 202 billion, including about 80 basis points of currency headwind	Year-ago revenue USD 180.17 billion
Operating income guidance	USD 22.5 billion to USD 26.5 billion	Midpoint USD 24.5 billion
Consensus revenue	About USD 202 billion	Just above the top of the guidance range
Consensus EPS	USD 1.96	Year-ago USD 1.95
Options-implied move	About 7.4% either way	Pepperstone preview

Because consensus revenue already sits at the top of guidance, the market is expecting a beat. In the Q2 reaction the share rose 15.3% the day after results, so the bar for Q3 is higher. An implied move of 7.4% on USD 249.09 equals about USD 18.4 either way (my calculation).

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Capex, Debt and Cash Flow: The Other Side of Amazon Stock

Amazon stock: cash item	Reading	Note
2026 capital spending plan	About USD 220 billion (Pepperstone) or near USD 200 billion (another report)	Reports differ; the plan reportedly rose by USD 20 billion in July on higher memory costs
Q2 net capex	USD 53.1 billion	H2 run-rate of about USD 61.8 billion a quarter would be about 17% higher
Trailing free cash flow	Negative USD 7.6 billion	Expected to stay negative in Q3
Long-term debt	USD 128.9 billion	Up from USD 65.6 billion at year-end

The strategy behind the share is to spend heavily on AI and cloud capacity now and earn higher margins later. That is the bull case in the UBS note, and it is also the main risk, since spending is rising and free cash flow is negative. The same preview notes that Amazon's holding in Anthropic, carried at about USD 190.4 billion at 30 June, could move reported earnings if a new pricing event occurs.

Risks to Amazon Stock

1. High expectations. The share rose sharply after Q2, and consensus revenue already sits above guidance.
2. Capex and debt. Higher spending, negative free cash flow and rising debt raise the cost of any AWS slowdown.
3. AWS growth. Analysts expect growth to slow to about 35% from 37%, and a bigger slowdown could hurt Amazon stock.
4. Cost inflation. Fuel, memory prices and tariffs can pressure margins in retail and cloud.
5. Event risk. An implied move of about 7.4% means the share can move sharply in either direction on results.

Conclusion: Amazon Stock Heads Into Q3 With Higher Targets and Higher Stakes

Amazon stock enters its 29 Oct results with an Amazon price target of USD 348 from UBS and USD 350 from Morgan Stanley, a guided operating income range of USD 22.5 billion to USD 26.5 billion and a clear debate about AWS margins. Targets are opinions, and results day can move the share by several percent either way. Read the company's own release, check the AWS margin and capex lines, and size any position to your own risk profile.

Frequently Asked Questions

What is the Amazon price target from Morgan Stanley and UBS?

Ans. UBS raised its target to USD 348 from USD 318 with a Buy rating on 26 Oct 2026, and Morgan Stanley raised its target to USD 350 from USD 335 on 20 Oct 2026. The Morgan Stanley source did not state the rating. Both notes point to AWS growth and profitability.

When are the Amazon Q3 results?

Ans. Amazon reports on Thursday, 29 Oct 2026 after the US market close, with the call at 5:00 PM ET. That is about 2:30 AM IST on 30 Oct (my calculation).

What does Amazon guide for Q3?

Ans. Amazon guided net sales of USD 197 billion to USD 202 billion and operating income of USD 22.5 billion to USD 26.5 billion. Consensus revenue is about USD 202 billion and consensus EPS is USD 1.96.

What is the AWS margin argument for Amazon stock?

Ans. UBS expects a 2027 AWS operating margin of 46% against a consensus of 38%, with about USD 80 billion of incremental AWS revenue. The risk is about USD 20 billion of added depreciation and heavy capital spending.

What was the Amazon stock price before the results?

Ans. Amazon stock closed at USD 249.09 on the Nasdaq on 26 Oct 2026. It had closed at USD 262.37 on 21 Oct. The 52-week range is USD 196.00 to USD 287.20.

Can Indian investors buy Amazon stock?

Ans. Amazon stock trades on the Nasdaq in dollars. Investors in India need an account that offers overseas investing and should check the rules, charges and tax treatment, and the effect of the rupee, before investing.

What are the biggest risks for Amazon stock?

Ans. The main risks are high expectations, capital spending of USD 200 billion to USD 220 billion, negative free cash flow, rising debt, slower AWS growth and a possible move of about 7.4% on results day. The capex figures differ between reports.

Is this article investment advice?

Ans. No. It is educational and not a recommendation to buy or sell. Please check the figures against company filings and your own risk profile before you act on anything you read here.