Amazon tends to be discussed as an AI data center story these days, with AWS indeed benefiting from today’s tech race. But if you zoom in on the last mile, you see another area where Amazon is making significant progress through a dense web of robots, same-day hubs, and drones quietly rewiring how cities get their parcels.
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The result is faster delivery, more profitable commerce, and a logistics system that feels like a finely tuned machine. That machine, in my view, is a big reason Amazon still deserves a premium multiple and why I remain bullish on the stock.
From Fulfillment Floors to Flying Bots
Amazon’s automation push is no longer about a few orange Kiva robots sliding under shelves. The retail giant now runs more than one million robots across its operations network, from mobile units that ferry inventory to robotic arms that sort and pack boxes. Inside next-gen sites such as the Sequoia-equipped fulfillment center in Shreveport, Louisiana, Amazon claims about 10x the robotics density of earlier buildings, with AI guiding how inventory moves and where it sits.
Management has been explicit that this is a core capital-allocation theme. On the most recent earnings call, CEO Andy Jassy described robotics as a “very substantial area of investment,” noting that over 1 million robots are already in the fulfillment network and emphasizing their role in safety, productivity, speed, and ultimately costs. The last mile is getting its own dose of physical AI, with Amazon already rolling out same-day nodes embedded inside urban areas designed to get popular items out the door within hours.
And don’t forget about the drones. Prime Air’s MK30 aircraft can deliver packages of up to five pounds in under an hour within a roughly 7–8-mile radius of a site, and Amazon aims to reach 500 million drone deliveries annually by 2030. This year, the company expanded live drone delivery to a small set of U.S. cities, including Tolleson (west of Phoenix), Waco, Pontiac, and San Antonio, where residents can pay a modest fee to have eligible items dropped in their yards by air.
When Robots Impact the P&L
Robots and drones may sound cool, but what matters is whether they move the needle when it comes to financial performance. Here, Amazon has begun to present real evidence in recent reports. In Q2, for instance, management explained that re-architecting the U.S. network into regional “mini-networks” and routing more parcels directly (from fulfillment center to delivery station) improved efficiency. The share of orders in those direct lanes rose by over 40% year-on-year, the average distance a package travels fell about 12%, and handling “touches” per unit dropped nearly 15%.
By Q3, the company was on track to set a third consecutive year of record Prime delivery speeds. CFO Brian Olsavsky highlighted that U.S. inbound lead times, the time it takes to get goods into the network, had been cut by nearly 4 days versus the prior year. Amazon is piloting three-hour delivery windows in select cities and says access to same-day or next-day service in rural communities has jumped about 60% in just a few months.
The margin impact is subtle but meaningful. In Q3, fulfillment expenses actually ticked down as a share of net sales, to about 15.4% from 15.5% a year earlier, despite faster shipping and higher volumes. Analysts see more to come. Bank of America estimates that robotics and drones, increasingly powered by AI, could generate roughly $16 billion in annual cost savings by 2032 and notes that Amazon already uses robots to handle around three-quarters of customer orders.
Paying Up for a Logistics and AI Flywheel
All of this still has to clear a valuation hurdle. At $223 a share, Amazon trades on close to 31 times FY2025 consensus EPS of $7.06. That implies growth of about 28% versus 2024’s $5.53, a step-up rate that would usually justify a high-twenties or low-thirties multiple for a high-quality compounder.
Importantly, consensus does not assume this year includes a one-off surge. Wall Street expects Amazon to compound EPS growth in the low to mid-teens beyond next year, driven by AWS and a fast-growing ad business. Also, the retail arm now operates as a data-driven platform, which will contribute to this trend. If robots and drones keep shaving a few points off fulfillment and transport costs, that earnings curve can steepen further.
The other way to think about 31 times earnings is as the price of a moat. You are not just paying that multiple for a cloud business with operating margins north of 30 percent, but also for a logistics network that is becoming increasingly difficult to replicate. Sure enough, data centers can be replicated with capital, though a robot-dense, drone-enabled urban grid that already ships billions of parcels a year is much tougher to mimic.
Is AMZN a Good Stock to Buy Now?
On Wall Street, AMZN stock features a Strong Buy consensus rating, based on 44 Buy and just one Hold rating. No analyst rates the stock a Sell. Also, Amazon’s average stock price target of $296.12 implies ~33% upside potential over the course of 2026.
Amazon’s Compounding Advantage Set to Shine in 2026
Amazon’s story extends well beyond cloud computing and advertising. At its core, the company is methodically building a robotics- and AI-driven logistics grid that compounds in value year after year. Each incremental improvement—more automation, smarter routing, denser fulfillment coverage—translates into faster delivery times, lower per-unit costs, and higher service reliability.
This flywheel is not merely operational; it is strategic. The scale, data, and capital required to replicate such a network create formidable barriers to entry, making the system increasingly difficult for competitors to clone. As the logistics platform matures, it enhances both Amazon’s retail economics and its ability to monetize “fulfillment” services.
In that context, a premium valuation multiple is justified. The durability of the network, the compounding efficiency gains, and the optionality embedded in Amazon’s infrastructure collectively tilt the long-term risk-reward profile decisively upward. For patient, long-term shareholders, the company’s logistics and automation advantage remains one of its most underappreciated—and powerful—sources of value creation.