Bank of America has lifted its price target for Amazon (AMZN) to $248, up from $230, citing the company’s strong advancements in robotics and AI (artificial intelligence). This upgrade reflects growing confidence in Amazon’s innovative tech and its power to fuel strong growth, making the e-commerce giant a more appealing pick for investors.
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Amazon Accelerates Growth with Major Robotics Expansion
BofA analysts highlighted Amazon’s major strides in robotics over the last few years. Today, more than 750,000 robots support roughly 75% of customer orders at Amazon. In late 2024, the company rolled out its first 12th-generation automated fulfillment center and, in May, unveiled eight new robots focused on boosting efficiency at delivery stations. These automation efforts have played a key role in driving Amazon’s strong revenue growth over the past year.
Additionally, BofA pointed out that Amazon aims to leverage robotics to reduce dependence on manual labor, improve order precision, and streamline warehouse operations, which could result in major cost savings. Analysts expect Amazon to roll out these advanced solutions more swiftly than rivals, thanks to the powerful AI capabilities of Amazon Web Services, further reinforcing the company’s competitive advantage.
Analysts also anticipate that Amazon’s growing use of robots and drones will sharpen its shipping speed advantage, potentially boosting long-term retail margins by an additional two percentage points. This strategic shift is expected to enhance the profitability of Amazon’s first-party operations, positioning the company more competitively in an increasingly AI-driven retail landscape.
Notably, analysts highlighted that Amazon’s retail operating profit margin has climbed to 5.4% in 2024, reflecting strong improvement since 2022. Looking ahead, they project that Amazon could achieve long-term retail margins of up to 11%, fueled by continued growth in high-margin areas such as advertising, third-party seller services, and subscription revenue.
Is Amazon a Good Stock to Buy?
According to TipRanks, AMZN stock has a Strong Buy consensus rating based on 47 Buys and one Hold assigned in the last three months. At $240.62, the average Amazon share price target implies an upside of 17.4% from the current level.
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