Amazon Strengthening Robotaxis Efforts, Leaving Investors Wondering if AMZN Shares are Worth Buying
Amazon's affiliate, Zoox, is set to revolutionise the autonomous vehicle industry with its new production facility in Hayward, California. Spanning 220,000 square feet, this state-of-the-art facility is designed to manufacture purpose-built autonomous vehicles from the ground up.
Currently, the facility is targeting one robotaxi per day in production, but plans are in place to scale up to a production capacity of up to 10,000 robotaxis per year once fully operational. This ambitious goal positions Zoox to launch commercial ride-hailing services in cities such as Las Vegas and San Francisco, with future expansion planned for Austin, Miami, and other markets.
The potential impact on Amazon's bottom line could be significant. With the robotaxi service representing a strategic expansion into autonomous ride-hailing, a high-growth sector with potential for both recurring revenue through rides and cost savings compared to human-driven services, the ability to deploy a large fleet could solidify Amazon's position in the autonomous mobility market and open new revenue streams beyond its core e-commerce and cloud businesses.
Amazon has continued to invest capital in Zoox to achieve this growth, and the race for market share in the robotaxi industry is on. Tech giants like Tesla, Amazon, and Alphabet are among the players vying for a piece of this rapidly evolving market.
Analysts remain positive about Amazon's stock, with 47 out of 54 analysts covering Amazon stock rating it as a "Strong Buy." The Street-high price target for Amazon stock is $305, suggesting a potential gain of 31% over the next 12 months.
It is important to note that Amazon invested $1.3 billion in robotaxi company Zoox in 2020. While its investment in building out a cloud infrastructure was initially viewed skeptically by many investors, it has since propelled Amazon stock to its current heights.
As Amazon continues to invest in Zoox and other emerging technologies, the robotaxi industry is becoming increasingly important for investors to watch. However, it is worth noting that Amazon's status in the e-commerce and cloud sectors is expected to dwarf any impact from its investments in these emerging technologies.
The information and data in this article are solely for informational purposes. The author, Chris MacDonald, did not have positions in any of the securities mentioned in the article on the date of publication.
In light of Amazon's continued investment in Zoox, a robotaxi company, the strategic expansion into autonomous ride-hailing, a high-growth sector, could potentially generate additional revenue streams beyond their core e-commerce and cloud businesses. This growth initiative, coupled with the potential cost savings compared to human-driven services, positions technology giants like Tesla, Amazon, and Alphabet to compete in the rapidly evolving robotaxi industry.
