Amazon ‘s latest job cuts should help the company’s profitability, Morgan Stanley said. Analyst Brian Nowak reiterated Amazon as a top pick. His price target of $150 implies an upside of 52.9% over where the big technology stock ended Friday’s session. CEO Andy Jassy said in an internal memo to staff last week that the e-commerce company would cut 9,000 jobs across cloud computing, human resources, advertising and Twitch livestreaming divisions. That comes on top of an earlier round that resulted in more than 18,000 job cuts. The profitability of Amazon Web Services could be specifically helped given that it was one business area Nowak said he believed was targeted in the latest round. For Amazon Web Services, he said second-quarter and full-year 2023 earnings before interest and taxes would rise by around 100 and 50 basis points, respectively, because of the cuts. The 2024 EBIT margin should rise by around 75 basis points, he said. “We believe a majority of reductions are from AWS/Advertising, which should help protect AWS EBIT through near-term deceleration and drive better long-term leverage,” he said in a Sunday note to clients. Taken together, Nowak said Amazon’s reductions make up around 8% of its white collar workers, compared with 24% at Meta and 6% at Alphabet ‘s Google. The first round was mainly targeted at lower-salaried roles, Nowak said, meaning the latest cuts can lead to higher average savings per employee. Company wide, the cuts should increase 2023 and 2024 EBIT by 5% and 6%, respectively, to $1.1 billion and $2.1 billion. Amazon was up nearly 1% in premarket trading. The stock has gained 16.8% since the start of 2023, regaining ground after tumbling nearly 50% in 2022. — CNBC’s Michael Bloom contributed to this report.