Amazon.com, Inc. (NASDAQ: AMZN) was among the biggest mega-cap gainers of the U.S./China tariff “deal” with a 6.9% gain to $206.50 in mid-day trading. The company itself and its countless number of sellers import many of the goods sold, so this big trade-bump may be unsurprising. And while the financial markets were not counting on a trade deal being reached over the weekend, there may be much more to Amazon’s future profits and cost savings than just tariffs — robots!
This is where a strategic analyst report may actually look like more of a secular trend for investors to benefit from. And while strategic investors may move funds around wherever they think their capital will be treated the best, riding secular themes can be very rewarding for those long-term investors who like to ride a trend for many years.
Justin Post, the analyst who follows Amazon for BofA Securities, sees Amazon’s robotics evolution continuing with more cost savings ahead. Amazon’s new suite of new robots will focus on making delivery stations and fulfillment centers more efficient. Post noted that the 12th Gen FC rollout is very early and is already driving efficiencies, making Amazon a leading robotics beneficiary. And over the longer-term, Post expects that Amazon will see greater delivery cost savings from AVs and robotics as well.
Post’s report touched on the eight new robots from last week’s Delivering the Future event and said that robots are already helping with about 75% of customer orders. He expects that “robot touchpoints per package” will increase as the company introduces more robot types into its operations. The new launches include robots for Amazon’s delivery stations and fulfillment centers, sorting packages more efficiently, assisting with handling, and even a combination of built-in conveyor belts and suction cups.
As for a strategic theme and a secular theme alike, BofA’s report shows the big picture change — Amazon has nearly 1 million logistics and fulfilment employees, with an annual churn rate of close to 50%; BofA believes robotics can help solve its potential long-term staffing bottlenecks. And BofA also believes that the cost savings from robotics will open more rural areas to same-day delivery.
If the firm is correct, Amazon’s returns can be approximately 20% of total fulfillment and delivery costs. The company’s new 12th generation fulfillment center in Shreveport, Louisiana is larger than 3 million sq. ft. and houses 10-times more robots than previous generations. CEO Andy Jassey has already indicated that the 12th generation fulfillment center can reduce fulfillment processing time by up to 25%. Here is what should really stand out in BofA’s report on future cost savings:
With fulfilment costs at $99 billion in 2024, even a 10% savings could add $10 billion in profits to the bottom line.
Now multiply those savings out over decade and see what the total savings come to. But wait, there’s more… BofA now believes that Robots and AVs could address 34% of Amazon’s total costs. The report details this:
Amazon’s robotic efforts thus far have been mainly focused on fulfillment, which represents around 17% of Amazon’s total costs (and 15% of total revenues). We believe delivery could be another area of material cost savings, with shipping costs representing another 17% of Amazon total costs (and 15% of total revenues). With Zoox AV capabilities ramping and more efficient MK30 drones launched late in 2024 (Amazon has a goal to deliver 500mn packages by drone annually by 2030), we believe Amazon will also be able find long-term cost savings in delivery, leveraging the company’s AI technical expertise.
BofA’s report does not come with a price target hike, but the firm did reiterate its Buy rating and keep its $230 price objective in place. BofA’s price objective had been $257 prior to April 9 (2025). Amazon has also been on BofA’s US1 List of the firm’s best investment ideas since July 3, 2024.
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As a reminder, the opinions, rating and price objective (target) represented herein are from BofA Securities. Oggonomics does not maintain its own rating nor does it keep any formal price targets of its own on Amazon. Investors should also be reminded that no single analyst report, no matter how positive and clear their message is intended to be, should ever be the sole basis for buying or selling a stock.
