We know that online retailing giant Amazon (AMZN) has been working to mechanize its operations for a long time now. But it has just come a little closer to no longer needing much in the way of human employees thanks to two new measures. And that sent Amazon shares down fractionally in Tuesday afternoon’s trading.
The first such move featured Amazon taking some parts of a Khosla Ventures-backed startup to basically mechanize its Whole Foods operations. This will only be coming to one location, however, more as a pilot program than anything else.
The location in question—in a suburb of Philadelphia—will add a “micro-fulfillment center,” as a CNBC report called it, to the building that will open up new options for shoppers that would not ordinarily be found at a Whole Foods. Said micro-fulfillment center dependant on a set of warehouse automation tools, where robots can pull items from shelves and then hand them off to other robots that assemble the products into bags.
And That Is Not the End
That by itself might be disturbing enough for anyone concerned about the future of human employees, but a look at a facility in Mt. Joliet, Tennessee, might drive the point home even harder. Fortune recently took a look at said facility, though it faced a brief delay when one of the internal robotic systems was briefly down.
After restarting, the MQY1 facility—which measures a whopping 3.6 million square feet and stands as the second-largest such facility in Amazon’s entire portfolio—was back up and running. Interestingly, the robots even demonstrated that they could effectively avoid humans while working, slowing down or moving around to avoid collision.
Further, this is not the limit of Amazon’s facilities; MQY1 is an “11th-generation” facility. Its Shreveport, Louisiana facility is a 12th-generation facility and the first one Amazon has opened.
Is Amazon a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on AMZN stock based on 45 Buys and two Holds assigned in the past three months, as indicated by the graphic below. After a 40.27% rally in its share price over the past year, the average AMZN price target of $224.38 per share implies 20.5% upside potential.
