If you think robots are for the birds, you should see what’s going on at Amazon (AMZN) .
The e-commerce colossus has three birds working at its fulfillment centers — only these aren’t our fine feathered friends.
💵💰Don’t miss the move: Subscribe to TheStreet’s free daily newsletter 💰💵
Rather, we’re talking about a trio of robots, named Sparrow, Cardinal and Robin, that handle packages and sort items at the company’s warehouses.
Robin and Cardinal can lift packages as heavy as 50 pounds, while Sparrow picks up items from bins and puts them in other containers.
Amazon said it has developed, produced and deployed more than 750,000 robots across its operations network. The goal: to pair “employees with the right technology to make their workday safer, easier and more productive, while delivering packages to customers faster than ever.”
Related: Veteran fund manager makes surprising pivot on S&P 500 amid tariff turmoil
Amazon is bringing automation “front and center,” Morgan Stanley analysts say, noting that the online retailer has developed six new significant warehouse robots in the past three years to cover almost every stage of fulfillment.
The investment firm estimated that by 2030 every 10% of U.S. units flowing through next-generation robotic-enabled warehouses will drive about $1.5 billion to $3 billion of annual recurring savings.
Amazon
“Amazon now has industrial robots that can increase efficiencies across the storage, inventory-management, pick/pack, sorting and outbound stages of the order-fulfillment process,” Morgan Stanley said.
“Given [that] fulfillment costs make up almost 20% of retail revenue (with labor making up an estimated about 60% of fulfillment costs), automation can have a significant impact on long-term [earnings before interest and taxes] potential.”
Analyst: Amazon a leader in humanoid robots
Morgan Stanley says Amazon’s latest fulfillment center, in Shreveport, La., which opened in September, is the first such facility that brings together the full fleet of its latest robotics innovations. The facility delivered 25% lower fulfillment costs during peak periods, the investment firm says.
Further, it said, if 30% to 40% of Amazon’s U.S. units are fulfilled through next-generation robotics-enabled warehouses by 2030, the move could lead to more than $10 billion in savings, which could be reinvested or used for other purposes.
Morgan Stanley expects Amazon to continue to expand its warehouse network while also upgrading the footprint toward next-generation robotics in its new construction and retrofitting of current facilities.
“The question of how quickly Amazon shifts volumes to robotics-enabled warehouses will likely come down to reasonable and improving paces of build/retrofit (current new robotics plants still take 1 to 2 years) balanced with not wanting to cause near-term disruption to AMZN’s retail service,” the firm said.
Amazon’s graphics-processing-enabled retail advances are underappreciated, with robotics-driven efficiencies near the top of the innovation list, the investment firm says, adding that “in effect, we think Amazon is among the leaders” in Physical AI and Humanoid Thematics.
Physical AI enables machines to perceive, understand and act in the physical world, while humanoid thematics focuses on areas such as the design, abilities and societal implications of humanoid robots.
More 2025 stock market forecasts
- Veteran trader who correctly picked Palantir as top stock in ‘24 reveals best stock for ‘25
- 5 quantum computing stocks investors are targeting in 2025
- Goldman Sachs picks top sectors to own in 2025
- Every major Wall Street analyst’s S&P 500 forecast for 2025
Morgan Stanley reckons that the humanoid robot population will be 40,000 by 2030 and grow to 63 million by 2050, potentially affecting 75% of occupations, 40% of employees and roughly $3 trillion in payroll.
The firm says advances in generative AI along with long-term demographic shifts creating labor shortages might help drive the development and adoption of advanced robots.
“The commercialization of humanoid robots will face many challenges, chiefly social and political acceptance, given their significant potential to disrupt such a large swath of the global workforce,” Adam Jonas, head of the firm’s global autos and shared mobility research, said in an August research note.
Jonas said that as many as 70% of construction jobs and 67% in farming, fishing and forestry could feel the impact of robotics, and “and while they may not be the best solution, they are an increasingly necessary solution for a world facing immense longevity challenges.”
As of Jan. 13, Morgan Stanley’s price target for Amazon was $280 with an overweight rating.
Amazon, which is scheduled to report fourth-quarter earnings on Feb. 6, has seen its stock climb nearly 41% from a year ago.
Bank of America: ‘Robotics a long-term tool’
Bank of America Securities analysts also cited Amazon’s robotics efforts in a recent research note, telling investors that it sees robotics “as a long-term tool for improving efficiency and reducing labor dependency.”
The firm, which has a buy rating and $255 price target on Amazon, says the company is still in the early days of implementing robots.
“One potential risk for 2025” is more up-front robotics investment hindering Amazon’s effort to widen profit margins. But “we believe growing robotics cost savings could lead to another multiyear efficiency cycle,” the investment firm said.
Related: Veteran stock trader’s latest Amazon move turns heads
B of A expects Amazon Web Services, the cloud computing platform, can meet expectations for 19% to 20% growth based on a growing contribution from AI.
Of course, it’s not just Amazon getting robotic.
In 2024, more than 1 in every 5 (nearly 21%) warehouses used some form of robotics, up from 15% in 2018, according to Hartford Insurance Co., which noted “that a robot’s biggest asset is its lack of human limitations.”
“Robots are not constrained by heat or chemicals, allowing them to perform tasks that are potentially dangerous to humans,” the firm said.
Robots’ impact on people
How all this is going over with humans is another story.
In 2023 an Amazon employee, Elizabeth Schneider, said in a company video that “robots are a tool for humans.”
“They are not a replacement for humans,” she said. “Humans are essential to the function of these robots.”
That same year, Darren Westwood, who worked at Amazon’s Coventry warehouse in Great Britain, wrote in The Guardian that “we are treated worse than the robots doing automated tasks in the warehouses.”
“If the robots have an issue, the company pays for them to be serviced, whereas if we drop below certain targets multiple times, we can be fired – we have to sort it out or get out,” he said.
Related: Morgan Stanley analysts reveal surprising stock pick for 2025
In the hospitality sector, using more robots to close labor gaps might cause more human workers to quit, according to a Washington State University study published last year.
The study, involving more than 620 lodging and food service employees, found that “robot-phobia” — specifically the fear that robots and technology will take human jobs — increased workers’ job insecurity and stress, leading to greater intention to leave their jobs.
The impact was more pronounced with employees who had real experience working with robotic technology, the study found. And it affected managers in addition to frontline workers.
The employees who viewed robots as being more capable and efficient also ranked higher in turnover intention, the study said.
“When you’re introducing a new technology, make sure not to focus just on how good or efficient it will be,” said lead author Bamboo Chen. “Instead, focus on how people and the technology can work together.”
Related: Veteran fund manager issues dire S&P 500 warning for 2025
