Tom Arceneaux was impressed.
Arceneaux, the mayor of Shreveport, La., was getting his first look at Amazon’s new 2.5 million-square-foot fulfillment center, which the e-commerce giant had built in his city.
Related: Goldman Sachs analyst updates Amazon stock price target after earnings
“This is big, big, big stuff,” Arceneaux told the Shreveport Times in September. “We are thrilled to have all of the workers and members of the Amazon team who are here to carry out their purpose and their mission.”
Named SHV1 after nearby Shreveport Regional Airport, the facility is one of two state-of-the-art robotics Amazon centers in Louisiana.
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“A lot of things that the robots do in any of our Amazon robotics, sortable buildings in North America is to assist humans,” Abhishek Gowrishankar, the center’s general manager said, such as reducing the need for people to walk a long distance or lift something that’s too heavy.
Shreveport pretty much owes its existence to technology.
In 1836, Capt. Henry Miller Shreve led the U.S. Army Corps of Engineers’ efforts to remove the Great Raft, a massive natural logjam that was obstructing shipping in the Red River.
Shreve used a specially modified riverboat, the Heliopolis, to clear the way, and the town that grew out of this endeavor was named in his honor.
Amazon CEO Andy Jassy
Amazon CEO has a plan for robotics
Amazon (AMZN) CEO Andy Jassy gave Shreveport a shoutout during the e-commerce titan’s Oct. 31 third-quarter earnings call, telling analysts that “we continue to innovate in robotics to speed delivery, lower cost to serve, and further improve safety in our fulfillment network.”
The facility, which boasts the latest in Amazon’s robotics, is designed to simplify how the e-commerce giant stores, picks, packs, and ships the products it sells.
Related: Goldman Sachs analyst revisits Amazon stock price target ahead of earnings
“Thus far, this new design reduces fulfillment processing time by up to 25%, increases the number of items we can offer for same-day or next-day delivery, and is expected to drive a 25% improvement in our cost to serve during peak within this next-generation facility,” Jassy added.
Amazon, which posted better-than-expected results, says it has more expansive automation and robotics plans than other retail peers. And Jassy added, “It’s still early days in how much automation we expect in our fulfillment network.”
Chief Financial Officer Brian Olsavsky said the Seattle company is increasing robotics and automation in the fulfillment network, including using artificial intelligence.
“We really do believe that AI is going to be a big piece of what we do in our robotics network,” Olsavsky said. “We just hired a number of people from an incredibly strong robotics AI organization. And I think that will be a very central part of what we do moving forward, too.”
Technology is the big item on Amazon’s to-do list, and it will be costly.
Olsavsky said Amazon expects roughly $75 billion of capital spending in 2024 and more than that next year, most of which will support the growing need for technology infrastructure.
This relates primarily to Amazon Web Services, the company’s cloud computing platform, as the company tries to meet demand for AI services, while also including technology infrastructure to support North America and international sectors.
Amazon analyst says it’s an e-commerce stock to own
Jassy said that generative AI represents “a really unusually large, maybe once-in-a-lifetime type of opportunity.”
“And I think our customers, the business, and our shareholders will feel good about this long term that we’re aggressively pursuing it,” he said.
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AWS sales increased 19% year-over-year to $27.5 billion, and Jassy said, “We’ve seen significant reacceleration of AWS growth for the last four quarters.”
Jassy named several AWS customers, including Amazon’s partnership with Nvidia (NVDA) , called Project Ceiba, where the AI-chip heavyweight has chosen the platform’s infrastructure for its R&D supercomputer.
Several investment firms issued research reports after Amazon’s earnings report.
JMP Securities raised its price target on Amazon to $285 from $265 and affirmed an outperform rating on the shares, according to The Fly.
Amazon reported solid quarterly results, beating estimates on the top and bottom lines, though Q4 net sales guidance was just below consensus. Q4 operating-profit guidance beat expectations by 4% and margins by 0.4 percentage point, the investment firm said.
JMP Securities reiterated that Amazon was the stock to own within e-commerce, given its wide selection of nondiscretionary items, its large and growing advertising business, and AWS’s exposure to AI.
Oppenheimer raised its price target on Amazon to $230 from $220 and maintained an outperform rating on the shares.
Amazon significantly beat Wall Street’s Q3 estimate for earnings before interest and taxes, led by e-commerce and AWS, disproving bears’ claims that online retail margins were plateauing, the investment firm said.
Telsey Advisory analyst Joseph Feldman raised the firm’s price target on Amazon to $235 from $215 while maintaining an outperform rating on the shares.
Amazon reported “strong” Q3 results and provided better-than-expected Q4 guidance, the analyst said.
Feldman says Amazon should continue to gain market share by leveraging its Prime member base, small-business relations, and technological edge.
Related: Veteran fund manager sees world of pain coming for stocks
