If you, like me, have noticed that online retailer Amazon’s (AMZN) one-day service is not what it used to be, then you will likely be happy to hear about its new development using generative AI to improve its same-day shipping. Investors were certainly happy about it; they sent shares up nearly 2% in Tuesday afternoon’s trading.
The new move requires Amazon to turn to generative AI systems in order to improve its delivery routes and upgrade its warehouse robots. The combination of faster goods processing and smoother routing with fewer delays should go a long way toward improving its ability to get goods out of warehouses and into people’s homes.
Amazon is also putting generative AI systems in place to make employee functions more “ergonomic,” which suggests a safer, less stressful environment. The company has been working on this since 2020. That was when Amazon first started to launch new models for “…demand forecasting and supply chain optimization.”
Return-to-Office Mandate
Meanwhile, Amazon is pushing its return-to-office mandate harder as well, with CEO Andy Jassy coming out with an update about the initiative. While Jassy noted that he “feel(s) good about the progress we’re making together,” that was not sufficient to allay any concerns about the notion of remote work.
Jassy struck all the standard points about, somehow, collaboration only truly being effective when you look at another person, and so on. Of course, it was not mentioned that a lot of expensive real estate was going unused while people worked from home. Also not mentioned was how many people likely preferred the option where they did not have to spend an hour or more of their own time, unpaid, driving to and from work. However, the new requirement has been apparently delayed to January 2, 2025, to “…ensure a smooth transition.”
Is Amazon a Buy, Hold, or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on AMZN stock based on 42 Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 34.5% rally in its share price over the past year, the average AMZN price target of $222.88 per share implies 19.03% upside potential.
