Morgan Stanley sees Amazon’s robotics rollout driving up to $4bn in savings

Investing.com -- Morgan Stanley said Amazon’s rapid expansion of robotics-powered fulfillment centers could generate between $2 billion and $4 billion in annual savings by 2027, as the company deepens automation across its logistics network.

In a new note, Morgan Stanley analyst Brian Nowak stated that Amazon “seems to be on the path to $2–4bn+ annual recurring fulfillment/warehouse efficiencies in ’27,” citing reports that the company plans to have about 40 next-generation robotics warehouses by 2027.

These facilities, powered by robotics and AI, include the prototype site in Shreveport, LA, which opened last year.

“We see this painting a path to $2–4bn of annual savings, with today’s report suggesting savings could be even higher,” Nowak wrote.

Morgan Stanley estimated that roughly 40 such warehouses would handle about 10% of Amazon’s global units, leading to 20%–40% improvements in fulfillment costs—equivalent to $0.60–$1.20 in savings per unit.

The firm noted that Amazon’s automation team reportedly expects the company could avoid hiring more than 160,000 U.S. warehouse employees by 2027, potentially translating to a cost reduction of $0.30 per global unit, a figure that “seems high to us,” the analyst said, but could point to up to $10 billion in total savings.

While Morgan Stanley said AWS growth remains the most important near-term driver for Amazon’s stock, it believes investors are “under-appreciating AMZN’s GenAI advances in its Retail business, with robotics-driven efficiencies near the top of the innovation list.”

Nowak reiterated Morgan Stanley’s Overweight rating and a $300 price target on Amazon.

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