Investing.com -- Amazon.com is accelerating its robotics rollout across its fulfillment and delivery operations, a move Bank of America (NYSE:BAC) says could unlock up to $16 billion in annual cost savings by 2032 and significantly reduce the company’s labor dependence.
While reiterating its Buy rating and raising its price objective to $248 from $240, BofA said Amazon’s robotics efforts are “still early,” but scaling rapidly.
The company now deploys over 750,000 robots supporting 75% of customer orders, with eight new delivery-focused robots unveiled in May and its first next-generation automated fulfillment center launched in late 2024.
As AI capabilities ramp, Amazon (NASDAQ:AMZN) is positioned to use robots to reduce labor dependency, improve order accuracy, and drive warehouse efficiency, as per the analysts who call the initiative a key driver of long-term margin improvement.
Amazon’s 12th-generation fulfillment centers, which use ten times more robots than previous designs, are expected to cut peak-period costs by 25%.
BofA also sees margin benefits from expanding automation in delivery stations and drone delivery tests in Texas and Arizona.
Assuming cost efficiencies of 20% in new fulfillment centers, 15% in delivery stations, and 40% from drones on select packages, the bank estimates total annual savings could reach $16 billion by the end of the decade.
BofA noted Amazon’s 2024 retail operating margin rose to 5.4%, up significantly from 2022, and sees potential for retail margins to reach 11% over time.
Robots and drones could contribute around two percentage points to that long-term target.
The analysts added that Amazon’s logistics automation, supported by its AI capabilities and AWS infrastructure, could further widen its cost and delivery speed advantage in an increasingly transparent retail environment.
