Morgan Stanley rates Amazon as their top stock pick and is optimistic about the expansion of its grocery business.

Morgan Stanley has listed Amazon as a preferred stock, and the institution believes that Amazon's expansion in the grocery sector "will unleash sustainable faster growth momentum." After-hours trading, Amazon's stock price rose by 0.3%. Analyst Brian Nowak wrote, "Progress in this sector is expected to drive significant growth for Amazon." He pointed out that the expansion of the grocery business is a way for Amazon to "improve the utilization of its existing leading logistics network and transportation fleet and procurement volume"; and in the long term, "obtaining more consumer data in the key category of groceries is crucial for Amazon's efforts to build the next generation of smart grocery services." Morgan Stanley has a "hold" rating on Amazon with a target price of $300.