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Amazon Options Volume Jump After Morgan Stanley Raised Price Target

$Amazon.com(AMZN)$  's options volume jumped Friday after Morgan Stanley raised its price target on the stock, boosting the investment appeal of contracts that give their holders the right to buy the shares at a specified price. 

More than 607,000 call options changed hands as of 3:03 p.m. in New York. That's much higher than the 20-day average volume of 397,831 contracts, according to data compiled by Bloomberg. Including put options, total trading reached 782,390 contracts, compared with the average of 567,967. 

Shares of the e-commerce giant that's also the dominant player in cloud services advanced 1.6% to $225.79 Friday. The stock gained, even as the $NASDAQ(.IXIC)$   struggled to stay in the green.

After the market closed on Thursday, Morgan Stanley analysts including Brian Nowak raised their price target on Amazon, their top pick, to $300, from $250, as they increased their earnings estimate by 9% for 2026 and 6% for 2027. They cited "a more constructive macro landscape with lower tariffs."

On Thursday, the Financial Times reported that Amazon is expanding its investment in Anthropic, possibly infusing multi-billion dollars into the artificial intelligence (AI) startup. In March 2024, Amazon said it invested $4 billion into Anthropic to be able to bring the most advanced generative AI to its customers worldwide.

Morgan Stanley said Anthropic has likely been contributing about 60 basis points or less to AWS growth. "But looking ahead, we model Anthropic to reach $10 billion of $19 billion of revenue in 2026/2027, the analysts said. 

Excluding Anthropic inference, AWS revenue has remained healthy, growing at 16% to 19% over the past five quarters, Morgan Stanley analysts said. That speaks "to the durability of the business even through GPU-related supply constraints that are expected to ease" in the second half of the year, they said, referring to graphics processing units by their acronym.

Call options that give the holder the right to buy Amazon shares at $225 attracted the heaviest trading with just an hour left before the contract expires. Volume on those calls reached 121,790 contracts, more than triple the open interest. 

Even large speculators and investors are pouring into the options market, driving the unusual activities. The biggest block trade had an active buyer paying a premium of $3.69 million premium for call options that give their holder the right to buy 100,000 Amazon shares at $250 by June 17, 2027.  

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