Morgan Stanley Crowns Amazon (AMZN) ’Top Pick’ as Grocery Expansion Heats Up

Amazon's fresh push into grocery just earned Wall Street's ultimate stamp of approval.

Morgan Stanley doubles down on retail disruption—naming AMZN its must-own stock as the e-commerce giant muscles deeper into America's $1 trillion food market. No timid expansion here. This is Amazon doing what it does best: scaling verticals, capturing wallets, and rewriting playbooks.

Forget legacy supermarkets sweating delivery fees and thin margins. Amazon's playing a different game—one where Prime memberships, logistics dominance, and Whole Foods integration create a moat wider than the Mississippi. The grocery aisle's becoming a tech stack, and Amazon's holding all the APIs.

Sure, analysts love a good 'top pick' label—almost as much as they love bullish price targets. But let's be real: when Morgan Stanley anoints your stock, hedge funds listen. Even if half their calls age like milk.

One thing's clear: Amazon isn't just selling bananas. It's consolidating the entire consumer economy—one delivery at a time.

Elevate Your Investing Strategy:

• Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.

Morgan Stanley Is Optimistic About Amazon’s Fresh Grocery Expansion

Nowak explained that assuming the 2026 total U.S. spend (grocery/CPG spend) on off-premise food and beverage consumption reaches $1.6 trillion, he expects about $600 billion of this spend to be on fresh/perishables. This amount is roughly the same size as Amazon’s current total estimated 2026 U.S. GMV of about $570 billion.

Therefore, traction in this market could drive material growth on top of AMZN’s current U.S. grocery business of over $50 billion, which to date does not include fresh grocery/perishables. Nowak estimates that every 1% ($6 billion) of U.S. fresh/perishables spend that Amazon is able to capture would add about 120 basis points to his 2026 U.S. GMV growth estimate.

The top-rated analyst expects Amazon’s expansion into the fresh grocery space to be profitable and deliver EBIT (operating profit) dollar upside, given that the logistics network already exists, higher margins, and a minimum basket size of $25.

Furthermore, Nowak believes that in the longer term, capturing more consumer data (such as purchase behaviors and brand affinities) in the critical fresh grocery market will be vital for Amazon to “create next generation agentic grocery offerings.”

Is Amazon Stock a Buy, Hold, or Sell?

Wall Street is bullish on Amazon stock, given its dominant position in the e-commerce market and the massive growth opportunities for the Amazon Web Services (AWS) cloud business amid the artificial intelligence (AI) boom.

With 44 Buys and one Hold, Amazon stock scores a Strong Buy consensus rating. The average AMZN stock price target of $264.32 indicates 15% upside potential from current levels. AMZN stock is up 5% year-to-date.