Pro Analysis

Morgan Stanley says buy Amazon shares due to its big grocery opportunity

Amazon CEO Jeff Bezos, founder of space venture Blue Origin and owner of The Washington Post, participates in an event hosted by the Air Force Association September 19, 2018 in National Harbor, Maryland. 
Alex Wong | Getty Images
Amazon CEO Jeff Bezos, founder of space venture Blue Origin and owner of The Washington Post, participates in an event hosted by the Air Force Association September 19, 2018 in National Harbor, Maryland. 

Morgan Stanley is optimistic over Amazon's strategy to build out more physical stores.

The firm reiterated its overweight rating for Amazon shares, saying customer data from its new stores will lead to more sales.

On Wednesday, Bloomberg reported Amazon is considering opening 3,000 of its cashierless stores by 2021, citing conversations with people familiar with the matter. The company currently has three of these Amazon Go stores.

"We are bullish on Amazon's reported opening of 3k automated Go stores over the next 3 years," analyst Brian Nowak said in a note to clients Thursday. "With Amazon Go stores [the company] will now get a glimpse into people's in-store shopping behavior. Over time, Amazon's ability to use all of these datasets should lead to a more customer-focused brick and mortar shopping experience and a higher share of wallet flowing toward Amazon."