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Investing.com - Wolfe Research has reiterated an Outperform rating and $270.00 price target on Amazon.com (NASDAQ:AMZN), citing expected cost savings from automation and retrofitting fulfillment centers. According to InvestingPro data, Amazon currently trades at a P/E ratio of 34.5x, with a market capitalization of $2.42 trillion, reflecting its position as a prominent player in the Broadline Retail industry.
The firm is raising its operating income estimates by 3.5% for 2026 following a deep dive analysis on the impact of automation and retrofitting legacy fulfillment centers on Amazon’s hiring needs. Wolfe Research now forecasts estimates 6.8% above consensus for fiscal year 2026 and 3.4% above for fiscal year 2027.
The analysis projects $2 billion per year in savings from automation, representing 3 percentage points of retail margin improvement over 10 years, and an additional $1 billion annually from retrofitting fulfillment centers over 5 years. Wolfe Research believes Amazon’s retail segment remains underappreciated and sees significant margin upside from increased automation reducing employee headcount requirements.
Wolfe Research expects AWS (Amazon Web Services) to remain a key focus area for the next 12-18 months, given the importance of artificial intelligence. The firm anticipates more visibility into easing capacity constraints and contributions from Anthropic, Amazon’s AI partner.
The research note follows recent headlines about Amazon potentially reducing its workforce by 30,000 employees, which would represent a high single-digit percentage of corporate staff and potentially $6-7 billion in savings.
In other recent news, Amazon plans to cut up to 30,000 corporate jobs, which will affect around 8.6% of its current corporate workforce of approximately 350,000 employees. This decision is reportedly part of Amazon’s adjustment after its hiring surge during the pandemic. In addition to the layoffs, Amazon is set to invest 1.4 billion euros ($1.63 billion) in the Netherlands over the next three years, focusing on enhancing artificial intelligence capabilities for entrepreneurs on its platform. Analyst firm Citizens has reiterated a Market Outperform rating for Amazon, with a price target of $285.00. Meanwhile, Stifel raised its price target for Amazon to $269.00 from $260.00, maintaining a Buy rating, citing stable consumer spending patterns. Furthermore, Amazon has introduced a new AI-powered shopping feature called "Help Me Decide," designed to assist customers in selecting products efficiently. This feature analyzes browsing history and shopping patterns to provide tailored recommendations. These developments highlight Amazon’s ongoing strategies in workforce management, technological investment, and consumer engagement.
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