June 20 - Amazon (AMZN, Financial) has the potential to become one of the most prominent competitors in the robotics and AI industry, and it could become an attractive alternative investment to Tesla (TSLA, Financial) due to its lower volatility.
Tesla used to be priced highly, and some investors might be reluctant to do it due to its expensive pricing as well as difficulties with the car business. According to the analysts, the company that has entered the political stage and competes with Chinese EV car manufacturers also contributes to the risk picture.
Amazon, on the other hand, is already utilizing the large-scale use of robotics in its logistics and facilities network. The company has installed more than 750,000 robots on its premises that consist of autonomous systems like Proteus and robotic arms like Sparrow and Cardinal, designed to increase the efficiency of operations in the company.
In the mean time, Amazon is continuing to expand AI with its AWS cloud services and also with the development of custom chips through Annapurna Labs. Its Zoox unit also plans to roll out the robotaxi service in Las Vegas and expand it to San Francisco.
Valuation may also favor Amazon. Forecasts from analysts suggest the stock trades at about 35 times 2025 earnings estimates, dropping to roughly 14 times by 2030 as profits grow. Tesla's forward price-to-earnings multiple, meanwhile, sits significantly higher, estimated at 172 times for 2025.
Morgan Stanley (MS, Financial) has projected the humanoid robotics market could expand to $5 trillion by 2050, while Goldman Sachs (GS, Financial) sees potential for $38 billion by 2035. Both Amazon and Tesla are identified as potential leaders in this space.
Bank of America (BAC, Financial) estimates Amazon could save $7.1 billion annually by 2032 through expanded use of robots and AI.
Shares of Amazon recently bounced back to around $215 after falling near $160 in April. The 50-day moving average is near $196, and the 200-day sits around $203. The analyst views pullbacks below $200 as potential buying opportunities for long-term investors.
