Tonix Pharmaceuticals stock halted ahead of FDA approval news
Investing.com -- Amazon’s push into warehouse automation is generating significant cost savings, with Morgan Stanley (NYSE:MS) estimating that the company could save up to $3 billion annually for every 10% of U.S. retail units processed through next-generation robotic fulfillment centers.
In a note Monday, the analysts said they see automation as a major driver of durable free cash flow and a key competitive advantage.
"Amazon (NASDAQ:AMZN) has developed six new significant warehouse robots in the past three years (now covering almost every stage of fulfillment)," analysts wrote.
The company’s growing fleet of industrial robots enhances storage, inventory management, picking/packing, sorting, and outbound logistics, reducing reliance on labor, which makes up about 60% of fulfillment costs.
Amazon’s Shreveport, Louisiana fulfillment center, which opened in September 2024, was the first to integrate the full suite of the company’s latest robotics innovations.
Morgan Stanley said the results have been promising, with analysts noting a 25% reduction in fulfillment costs during peak periods.
Looking ahead, the bank’s base case assumes that 30% of Amazon’s U.S. retail units will be processed through robotic fulfillment centers by 2030, unlocking $4.5 billion to $9 billion in savings annually.
If adoption reaches 40% or more, Morgan Stanley believes total efficiencies could exceed $10 billion per year.
Analysts see four potential paths to accelerating these savings: unconstrained investment capital, advancements in shipping, international expansion, and autonomous delivery.
Morgan Stanley maintains an Overweight rating on Amazon with a $280 price target, and a bull case target of $350, citing the company’s underappreciated position as a leader in "Physical AI" and robotics-driven retail efficiencies.
"Scaling robotics through the fulfillment center network will take time," analysts noted, but the long-term cost savings and EBIT impact could be substantial, positioning Amazon as an even stronger e-commerce powerhouse.