Tesla Faces Challenges as Amazon Innovates with Robotics

Investors in Tesla (NASDAQ: TSLA) have had little to celebrate in 2025. Currently, Tesla ranks as the worst performer among the “Magnificent Seven,” with shares dropping approximately 25% this year.

This downturn marks a stark contrast to the surge in Tesla’s stock following Donald Trump’s victory on November 5. Ironically, the sell-off can be traced to new administration policies. Concerns are growing among investors regarding potential tariffs affecting Tesla’s operations and Elon Musk’s extended role in Washington, D.C., as part of his new responsibilities overseeing the Department of Government Efficiency (DOGE).

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Amazon’s Innovative AI Investments Could Transform Fulfillment

Have you ever wondered how Amazon delivers packages to your door in just two days—or even the same day? A significant factor behind Amazon’s swift logistics is its investment in robotics. In 2012, Amazon acquired robotics company Kiva Systems, which initiated a widespread deployment of robots across its warehouses. These robots assist human workers by handling tasks such as packaging, moving inventory, and labeling. Crucially, artificial intelligence plays a vital role in training these robots to improve efficiency.

Amazon plans to invest over $100 billion this year in AI infrastructure. Although most of this spending will focus on Amazon Web Services (AWS), research analyst Brian Nowak from Morgan Stanley has suggested that investors should also pay attention to robotics as a key area.

Nowak’s analysis reveals that one Amazon warehouse equipped with various robots achieved a 25% reduction in fulfillment costs. He estimates that this efficiency could boost Amazon’s operating profits by up to $3 billion. As the company increasingly automates its warehouses, it may well save tens of billions annually.

Image source: Getty Images.

Implications of Amazon’s Robotics for Tesla Investors

Beyond its electric vehicle (EV) and energy storage divisions, Tesla is developing its own robotics platform called Optimus. Tesla plans to integrate this fleet of humanoid robots into its manufacturing processes, potentially allowing Optimus to assist in different environments outside of traditional manufacturing.

Importantly, there is a key distinction between Amazon’s robotics and Tesla’s Optimus. While Optimus is designed as a humanoid robot capable of moving and manipulating objects with dexterity, Amazon’s robotic systems primarily consist of mechanical arms and wheeled carts utilizing lasers for navigation.

Amazon’s substantial investments in AI and robotics have enabled the company to establish a leading retail platform, setting it apart from competitors like Target and Walmart. The successful integration of robotic applications within manual labor environments serves as a precedent. Goldman Sachs forecasts that the total addressable market for robotics could reach the tens of billions in the coming decade.

For Tesla investors, Amazon’s advancements in robotics may provide indirect benefits as Tesla scales its Optimus initiative. With a projected growth in the AI robotics market, there will be diverse applications, highlighting opportunities for humanoid robots like Optimus.

Ultimately, a successful rollout of Optimus could result in significant cost savings for Tesla, similar to those Amazon has experienced in its fulfillment centers. Furthermore, Optimus represents a strategic move for Tesla to diversify its business, which currently relies heavily on the competitive EV market.

Given rising infrastructure costs, it’s likely Amazon will continue to focus on robotics to generate savings. This situation creates a potential opportunity for Tesla to partner with Amazon, showcasing the Optimus bot beyond its car factories.

While Amazon’s robotics developments may not provide immediate excitement for Tesla investors, it’s wise to monitor Amazon’s AI progress, which extends beyond chips, data centers, and cloud computing.

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John Mackey, former CEO of Whole Foods Market, which is an Amazon subsidiary, serves on The Motley Fool’s board of directors. Adam Spatacco holds positions in Amazon and Tesla. The Motley Fool is invested in and recommends Amazon, Goldman Sachs Group, Target, Tesla, and Walmart. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.