Amazon AWS spending looks durable, per Morgan Stanley
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Amazonâs (NASDAQ:AMZN) cloud business appears resilient to spending cuts among tech companies, according to Morgan Stanley.

A team of analysts at the bank led by Brian Nowak wrote that while a slowdown in spending is a looming issue, it is most pronounced in smaller private enterprises. Overall, less than 10% of total AWS revenue is drawn from small and startup businesses that are most likely to pause, per the analysis. 

âWhile demand at public companies is not immune to risk â Coinbase (COIN) is looking to slash spending on AWS and other industries may be impacted by a broader pullback â we think this spend is likely to be more durable,â the team wrote on Tuesday. âIn addition, we also believe AWS should benefit from its diverse and growing customer base (across a growing number of industries) and strong backlog of growing client spend.â

The bankâs analysis suggested that AWS risk from a potential slowdown in start-up spend should come in around 1-2% of expected 2023 EBIT. 

Given the resilience of the AWS segment alongside a broadly strong base across Amazonâs (AMZN) sprawling business endeavors, Nowak assigned a âBuyâ rating to shares with a $175 price target. Shares closed at $103.67 after Mondayâs steep selloff.
Read more on the impact of the Seattle-based behemothâs recent stock split.