Amazon's AI-Powered Humanoid Robots: Revolutionizing Delivery and Cutting Costs

Amazon delivery robots part of plan to automate $200B in logistics costs: analyst

Amazon's experiment with delivery robots might have a science-fiction feel, but the potential cost savings for the e-commerce giant would be anything but fantasy. Morgan Stanley estimated the e-commerce and cloud giant is now investing to automate roughly $200 billion in logistics costs -- a sum equal to 35% of its online retail revenue -- which includes using AI-powered humanoid robots to make deliveries. The new robots, according to a report in The Information , would go directly to customers' doors from Rivian electric vans, reducing delivery times and labor costs for the billions of packages Amazon ships annually. The company is reportedly testing these AI-powered humanoid robots at a San Francisco "humanoid park" obstacle course. Amazon's reported work on software to use human-like robots in package delivery represents the next chapter in the company's lucrative automation strategy, the analysts said in a note to clients late Thursday. The firm views humanoid delivery robots as a key driver of "more durable market share gains" in Amazon's logistics network, which already holds a 30% share of the U.S. parcel delivery market, surpassing UPS and FedEx . Morgan Stanley projects that 10% of U.S. units that go through robotics-enabled warehouses can lead to $2 billion to $3 billion in annual savings by 2030. While acknowledging the potential for the deployment of humanoids is further out, the analysts highlighted Amazon as "one of the companies best positioned to deliver material financial return from physical AI robots within the next 3-5 years." They also see Amazon's retail business as the "most underappreciated" beneficiary of generative AI in the tech industry, with the potential to deliver "more items to more people faster ... and in a more cash flow generative manner" over the next five to 10 years. Shares of the e-commerce giant were up as much as 2% Friday at roughly $212 per share. The stock is down 3.7% year to date. AMZN 1Y mountain Amazon 1-year return Amazon's track record supports this optimism. In 2024, the company lowered its global "cost to serve" per unit for the second consecutive year, building on its success in 2023 when it cut costs by over 45 cents per unit. This continued efficiency drove a 61% year-over-year increase in worldwide operating income, reaching a record $21.2 billion last year. The company was able to achieve this by regionalizing its fulfillment network, which shortened delivery distances and enabled it to deliver over 9 billion items to Prime members globally in 2024 with same-day or next day delivery, a company record. Amazon has also been getting help from robots to stow items in warehouses, a task previously done by humans, and leverages machine learning to optimize inventory placement and demand forecasting. As Amazon continues to innovate, investors like us also see a clear path to enhanced profitability and market dominance in logistics given its unmatched scale and disciplined focus on reducing costs through automation. We currently have a buy-equivalent 1 rating on Amazon and a price target of $240 on the stock. (Jim Cramer's Charitable Trust is long AMZN. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Amazon Eyes $7 Billion In Savings By 2032 With Robots And AI - Amazon.com (NASDAQ:AMZN)

Bank of America Securities analyst Justin Post maintained a Buy rating on Amazon.com Inc AMZN with a price target of $248 on Friday. Post noted that Amazon is designing an indoor obstacle course for humanoid robots, one of many steps to train them for package delivery. The initial course is the size of a coffee shop, per the Information report, but the analyst said it would likely increase before testing expands to public roads. Also Read: Amazon Expands Global Data Centers, Boosts Access To Nvidia AI Chips For Cloud Customers He said the report indicates that humanoids could eventually ride in the back of Rivian vans before leaping out to deliver packages. Reportedly, Amazon is developing the AI software and will likely test several third-party hardware solutions. One robot from Unitree has a cost estimate of around $16,000 per unit, which could translate into a significant financial incentive for Amazon to automate, Post noted. As with autonomous vehicles (AVs), the analyst expects several years of testing before trials begin. He said obtaining regulatory approval on a local basis could be a challenge and would limit rapid geographic expansion. Finally, consumer acceptance of robot delivery would likely take time. Post noted that automating internal processes would be much easier than external ones. He continues to expect a much larger 5-year internal savings opportunity in fulfillment centers and delivery stations than last-mile. In Post's recent deep dive on Amazon Robotics, he outlined delivery as a new but significant area for cost savings in the coming years. In May, the analyst said that Amazon unveiled seven robots to drive efficiencies within its delivery stations. This indicates an increased focus on using robots to drive efficiencies in outbound shipping processes. For last-mile delivery, the company continues to test autonomous drones and targets 500 million packages delivered by drone per year by 2030, he said. Not including potential savings from humanoids, Post estimated that robotics in delivery could drive over $7.1 billion in annual savings by 2032. The analyst said artificial intelligence should be an essential driver of robotics, and emerging robot applications can expand Amazon's AI opportunity beyond AWS to retail. He noted Amazon's long-term retail margin opportunity at 11%, assuming that Amazon can operate first-party (1P) at breakeven, improve third-party (3P) margins to 20%, and operate Prime at a slight profit and advertising at 55%. With its leading robotics infrastructure, Post noted that Amazon could have a better opportunity to move 1P to profitability as a low-cost provider and move 3P shipping margins even higher. As per the analyst, this should drive demand as AI agents increase retail shopping transparency, benefit retailers with lower cost structures, and accelerate delivery. Price Action: Amazon stock was up 1.96% at $211.98 at last check Friday. Read Next: AMD Acquires Another Company To Expand AI Arsenal Image: Shutterstock AMZNAmazon.com Inc$212.552.23%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum65.70Growth97.13Quality70.12Value50.31Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs