Morgan Stanley's estimates put Amazon's capital outlays at $355 billion in 2027 and $365 billion in 2028, making the returns from its expanding cloud and AI infrastructure a central investor question.
Amazon has not announced those amounts as company spending plans; they are the bank's projections. The projected buildout entails more computing equipment and data centers, and its payoff depends on whether cloud and AI demand can support the added investment.
Morgan Stanley's model puts AWS operating margins at 42% in 2027 and 44% in 2028. That outlook depends on sales expansion becoming earnings while Amazon carries the costs of additional infrastructure, making the ability to convert growth into profit central to the forecast.
The investment case also includes possible savings from warehouse robots. Morgan Stanley estimates that a 10% share of Amazon's global merchandise shipments passing through robot-equipped fulfillment sites could reduce annual costs by $2 billion to $4 billion. Whether those savings materialize turns on rollout speed, further equipment outlays and how the centers perform.
For Amazon Web Services (AWS), Morgan Stanley raised its revenue-growth estimate for 2027 to 47%, from 41%, and for 2028 to 42%, from 37%. The higher forecasts make cloud performance a key condition of the bank's wider Amazon investment view.
The bank counts Amazon Bedrock, an AWS offering that gives companies access to AI models, among its possible growth drivers. Morgan Stanley also points to software agents that may guide shoppers from product searches toward a purchase; it treats their contribution as a future possibility.
Together, the estimates put a large investment burden on Amazon, with prospective returns tied to faster cloud sales, stronger AWS profitability and possible automation savings. The bank's projections depend on those gains emerging as spending increases.
EconoTimes previously covered Morgan Stanley's Amazon price target and AWS outlook. The current estimates add capital spending to that earlier outlook.
Amazon said it will discuss third-quarter results on Oct. 29; investors may look for comments on cloud and AI demand and infrastructure costs.
