Morgan Stanley Sees 12% Effective Tariffs and 50% Amazon Upside on GenAI
Morgan Stanley forecasts the Supreme Court's removal of key tariffs will cut the US effective import duty rate to 12%, lowering import costs by eight percentage points. It names Amazon a top GenAI play with a 50% upside target, driven by robust AWS AI revenue growth and improving e-commerce margins.
1. Tariff Rate Adjustment
Morgan Stanley analysts calculate that striking down key duties reduces the US effective import tariff to 12%, down from prior estimates near 20%. They project this 8-point cut could boost margins for import-reliant consumer and retail firms and ease inflation pressures.
2. Amazon GenAI Bull Case
The firm identifies Amazon as a leading GenAI investment, assigning a price target implying 50% upside. Analysts highlight accelerating AWS AI service sales—forecast to grow above 30% annually—and improving e-commerce profitability as primary catalysts for the rating.