Investors in Tesla (TSLA 0.09%) stock haven't had much to celebrate so far in 2025. As I write this, Tesla is the poorest-performing stock among the "Magnificent Seven" so far this year -- with shares sliding roughly 25%.
This is quite a change for a stock that rocketed to new highs following Donald Trump's victory on Nov. 5. Ironically, some of the primary causes of the Tesla sell-off can be tied to the new administration. Namely, the potential impacts of new tariffs on Tesla's business as well as Elon Musk's prolonged time in Washington, D.C., as part of his new responsibilities leading Trump's Department of Government Efficiency (DOGE) effort have caused some investors to worry.
Below, I'll detail how Amazon (AMZN +0.97%)is leveraging generative AI in its fulfillment centers and make the case for why Tesla investors should be excited about this move.
NASDAQ: TSLA
Key Data Points
Amazon's newest AI investment could be a game changer
Have you ever wondered how Amazon is able to deliver packages to your front door in just two days (or sometimes, even on the same day)?
One of the pillars supporting Amazon's unparalleled logistics capabilities is the company's investments in robotics. Back in 2012, Amazon acquired a robotics company called Kiva Systems. From there, Amazon began deploying robots throughout its warehouses that can assist human workers with basic tasks such as packaging, moving inventory, labeling, scanning, and containerizing. While you may not realize it, AI plays an integral role in training and refining these robots.
According to Amazon's executive leadership, the company is expected to spend more than $100 billion this year on AI infrastructure. While the vast majority of this spend will be dedicated to Amazon Web Services (AWS), research analyst Brian Nowak of Morgan Stanley recently hinted that he sees robotics as another area that Amazon investors should be paying attention to.
According to Nowak's analysis, one Amazon warehouse that is fully equipped with the company's various robots experienced 25% in fulfillment cost reductions. To put that into perspective, Nowak suggests that Amazon could expand operating profits up to $3 billion. The lucrative effect of this model is that as Amazon continues to integrate more automation into its warehouses, the company could be positioning itself to save tens of billions of dollars per year.
Image source: Getty Images.
Why should Tesla investors care about Amazon robotics?
Outside of the energy storage and electric vehicle (EV) businesses, Tesla is developing its own robotics platform. Known as Optimus, Tesla is building a fleet of robots that it plans to integrate into its own car factories to assist workers with manufacturing processes. Moreover, Optimus has the potential to assist in other real-world environments outside of manufacturing and warehouses.
There is one big difference I need to point out between Amazon's robotics and Tesla's Optimus. Optimus is a humanoid robot, capable of walking around and moving objects with its own dexterity features. By contrast, Amazon's robotics are mainly comprised of mechanical arms and small carts that move around leveraging wheels and lasers.
Amazon's big bets on AI and robotics have helped the company build an industry-leading retail platform and differentiate itself from the likes of Target and Walmart. Amazon has proved the concept of integrating robotic applications in manual labor environments. Goldman Sachs has predicted that the total addressable market (TAM) for robotics will be in the tens of billions over the next decade.
To me, Amazon's use of robotics still provides an indirect benefit to Tesla as the company seeks to scale the Optimus business over the next few years. Given the forecast market size for AI robotics, my logic is that there will be a variety of use cases -- some of which should include humanoid bots such as Optimus.
In the long run, a successful deployment of Optimus could lead to meaningful cost reductions for Tesla's business -- much in the same way that Amazon has recognized cost synergies in its fulfillment centers. Furthermore, Optimus represents a way for Tesla to diversify its overall business, which currently relies heavily on the fiercely intense EV market.
I suspect that robotics will become an increasing area of focus for Amazon, as it looks to generate any form of savings that it can in the midst of rising infrastructure costs. This provides Tesla a unique opportunity to try to partner with Amazon and showcase the Optimus bot outside of its own car factories.
While Amazon's use of robotics isn't necessarily a reason for Tesla investors to get excited right now, I still think it would behoove Tesla investors to keep an eye on Amazon's AI investments outside of chips, data centers, and cloud computing.
