Morgan Stanley Sets $300 Target on Amazon (AMZN) After Globalstar Deal

TLDR

• Amazon agreed to acquire Globalstar for ~$11.6 billion to boost its Leo satellite ambitions
• AMZN stock rose ~4% following the announcement
• Globalstar brings 24 satellites, 50+ more on order, and key L and S band spectrum licenses
• Morgan Stanley analyst Brian Nowak rates AMZN Overweight with a $300 price target (~20% upside)
• The deal could weigh on Amazon’s free cash flow, with $200 billion in capex already planned for 2026

Amazon has agreed to acquire Globalstar for approximately $11.6 billion, a move aimed at accelerating its Amazon Leo satellite constellation and taking on SpaceX’s Starlink more directly.

AMZN stock jumped around 4% following the announcement.

Amazon.com, Inc., AMZN

The deal gives Amazon access to Globalstar’s 24 operational satellites and agreements for roughly 50 more. More importantly, it hands Amazon scarce L and S band spectrum licenses, which are critical for direct-to-device (D2D) satellite connectivity.

D2D lets devices connect directly to low Earth orbit satellites without needing cell towers. It’s a market Amazon has been eyeing, with a broader rollout planned around 2028.

Amazon also inherits Globalstar’s existing partnership with Apple, which uses the network for Emergency SOS, Messages, Roadside Assistance, and Find My on iPhone 14 and newer, as well as Apple Watch Ultra. Amazon extended and expanded that deal as part of the acquisition.

For context, Amazon has just 241 satellites deployed so far. Its 2020 FCC approval requires it to have half of its planned 3,236-satellite constellation in orbit by July 30, 2026. Amazon has already asked the FCC for an extension.

SpaceX, by comparison, has over 10,000 satellites in orbit and launches its own rockets. That launch capacity gap remains Amazon’s biggest structural disadvantage.

Morgan Stanley Backs the Move

Morgan Stanley analyst Brian Nowak outlined five reasons the Globalstar deal makes strategic sense for Amazon Leo.

He cited the spectrum licenses, the expanded satellite fleet, D2D market access, Globalstar’s Band 53 terrestrial spectrum for potential future use in warehouse automation and robotics, and the Apple relationship as key value drivers.

Nowak kept his Overweight rating on AMZN and raised his price target to $300, implying around 20% upside from current levels.

The broader analyst community is aligned. Out of 45 analysts covering the stock, 42 rate it a Buy and 3 rate it a Hold. The average 12-month price target sits at $284.77, pointing to roughly 14% upside.

Spending Pressure Builds

The acquisition adds to what is already a heavy spending year for Amazon. The company has guided for $200 billion in capital expenditures in 2026, which could push free cash flow into negative territory.

If Leo investments ramp further into 2027, the pressure on free cash flow could continue for several years.

Amazon does have early commercial deals in place, including agreements with airlines and wireless carriers, as CEO Andy Jassy highlighted in his recent shareholder letter. But the Leo business carries more uncertainty than Amazon’s core cloud and e-commerce operations.

Amazon’s last satellite launch brought its total to 241 deployed satellites, still well short of the FCC’s mid-year deployment milestone.

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