Amazon is leaning deeper into artificial intelligence and robotics to reshape its operations and retail strategy, and analysts are raising their targets and outlook ahead of the company’s Q3 earnings on Oct. 30.
The strategy helped improve the company’s stock, up 4.8% this week, bringing its year-over-year gain to 20.8%.
New AI technologies and investments
Last week, the e-commerce giant unveiled two new technologies: Blue Jay, a robotic coordination system, and Project Eluna, an agentic AI model designed to help warehouse operators make smarter real-time decisions.
According to Tye Brady, Amazon Robotics’ chief technologist, the goal of these technologies is to “make work safer, smarter, and more rewarding” for its employees.
Built on Amazon’s previous initiatives Vulcan and DeepFleet, these tools are advancing the company’s “approach to physical AI – technology that learns from contact, coordinates at scale, and supports people in the real world.”
Image source: Gologursky/Getty Images for The New York Times
How Amazon’s Blue Jay and Project Eluna are changing the game
The Blue Jay robotic arm will assist frontline workers, said Brady, performing many tasks at once and “creating greater efficiency in less physical space.”
It’s like a conductor leading an orchestra, with every motion in harmony.
Project Eluna, an agentic AI system, will provide reasoning in complex operational situations by pulling in historical and real-time data “to anticipate bottlenecks and keep operations running smoothly.”
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Amazon also shared Oct. 27 that it will invest €1.4 billion in the Netherlands over the next three years, its most significant financial commitment to the country since its launch in 2020.
The investment will support both its Amazon Web Services (AWS) and the company’s retail operations, including infrastructure development, technology upgrades, and logistics.
With these investments, we can service our customers even better, improve our services, while also creating opportunities for local businesses to grow and further support Dutch entrepreneurs with our technology and expertise.
Country Manager for Amazon Belgium and Amazon the Netherlands Eva Faict
The company’s stock rose 1.6% on Oct. 27 following the announcement. Despite a 1.9% decline in its stock price this quarter, analysts remain bullish on its upcoming Q3 report, following these developments.
Analysts on Amazon: optimism and earnings preview
Investment bank and financial services company Stifel raised its Amazon price target to $269 from $260, maintaining a buy rating, citing stable consumer spending and the expansion of same-day grocery delivery for Prime Members.
Meanwhile, KeyBanc resumed coverage of Amazon with an overweight rating and set a $300 price target, citing retail gains through advertising. However, it also noted that investors’ views on Amazon’s cloud business were “too pessimistic,” as reported by TheFly.
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Bank of America’s earnings preview for Amazon sets revenue expectations at about $179.2 billion, 1% above Wall Street consensus.
The bank also points to strengths in retail sales, online advertising, and the AWS layoffs in July. These factors are expected to contribute to an increase in operating income, with a projected GAAP profit of $20.4 billion.
Amazon expands advertising as automation concerns loom
Amazon is reportedly inviting ad agencies to test its demand-side platform (DSP) against those of its competitors, even covering the cost of the rivals’ ad inventory, as reported by TheFly.
A DSP, or digital advertising system, is a platform allowing companies to purchase online ads automatically, without needing to contact individual sellers.
By seeking ad agencies to test its DSP, Amazon is showing increased confidence in the monetization potential of its advertising business.
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However, these strategic developments come with a caveat. According to internal documents reviewed by The New York Times, Amazon’s robotics team is working toward automating up to 75% of its operations and expects to avoid hiring more than 600,000 U.S. workers by 2033.
Amazon has described the documents as one team’s perspective and said they do not reflect the company’s overall hiring strategy.
In the official statement accompanying the Blue Jay and Project Eluna Launch, which combines “robotics and AI to reduce physically demanding tasks” and “simplify decisions,” Amazon noted that these developments are a means to grow.
The company continues actively hiring at operations facilities across the country.
The real headline isn’t about robots. It’s about people – and the future of work we’re building together.
Amazon Robotics Chief Technologist Tye Brady
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