Amazon Could Save Billions with Robotics Integration by 2030

Key Insights: A Morgan Stanley analyst forecast suggests that Amazon.com Inc. AMZN might reduce its costs by over $10 billion annually by 2030 through the adoption of innovative robotics technology.

Cost Savings Ahead: Morgan Stanley’s Brian Nowak estimates that increasing the use of robots in Amazon’s U.S. warehouses could save between $1.5 billion and $3 billion for every 10% of units processed via these advanced systems. He believes that by 2030, this robotics penetration could reach 30%, driving significant efficiencies.

For over a decade, Jeff Bezos’s company has been steadily enhancing its robotics capabilities, rolling out six new robotic designs just since 2022. These robots are engineered to streamline operations across the fulfillment process, affecting various phases like inventory management, storage, picking and packing, sorting, and delivery.

With fulfillment expenses constituting nearly 20% of Amazon’s retail revenue, automation has the potential to dramatically improve its long-term earnings before interest and taxes (EBIT).

Related News: Bernie Sanders has raised concerns about working conditions at Amazon’s warehouses, with the company responding that his claims are fundamentally flawed.

Analysts’ Views: Analysts on Wall Street also recognize Amazon’s growth potential. Emphasizing the importance of AWS, Robotics, and Prime Video Ads, Needham analyst Laura Martin has issued a Buy rating with a price target of $250. Similarly, BofA Securities’ analyst Justin Post has maintained a Buy rating but set a slightly higher price target of $255.

Amazon plans to announce its earnings on February 6, after market close. In early trading on Tuesday, the stock rose by 0.58%.

Analysts have reached a consensus price target of $254.15 for Amazon, based on evaluations from 41 experts according to Benzinga Pro. Recent assessments from Telsey Advisory Group, JMP Securities, and Scotiabank indicate an average price target of $288.67, indicating a potential upside of 20.89% based on their analyses.

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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.