The Prof G Pod with Scott Galloway

No Mercy / No Malice: Big Tech Stock Pick of 2026 is Amazon

November 1, 2025

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  • In \ 
  • Scott Galloway names Amazon as the most undervalued company in the Magnificent 7, arguing that investors are missing the margin expansion story driven by automation in its retail segment. 
  • Amazon's significant investment in robotics and AI is projected to yield massive operational leverage, with potential annual cost savings reaching \$10 billion by 2030, translating to substantial enterprise value. 
  • The convergence of AI and robotics is rapidly automating Amazon's physical operations, leading to a projected displacement of hundreds of thousands of warehouse jobs, which Galloway frames as a wealth transfer from workers to shareholders. 

Segments

Sponsor Messages and Introduction (Unknown)
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2025 Pick Review and Amazon Thesis
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(00:02:09)
  • Key Takeaway: Alphabet was the 2025 pick, correctly identifying AI and antitrust threats as overblown nuisances, while the 2026 pick, Amazon, is undervalued due to automation.
  • Summary: Galloway reviews his 2025 pick, Alphabet, noting its 61% year-over-year gain despite perceived existential threats. He argues the market underestimates Amazon’s automation and misses its retail growth engine. Amazon’s current PE ratio of 34 is significantly below its five-year average of 60.
Automation Driving Retail Margin Expansion (Unknown)
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Bits vs. Atoms Logistics
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(00:05:25)
  • Key Takeaway: Amazon is fundamentally a logistics company excelling at moving atoms, unlike most Mag7 peers focused on bits, which positions it uniquely for physical world efficiency gains.
  • Summary: Fulfilling one-click purchases requires Amazon’s massive physical infrastructure, including 40,000 semi-trucks and 110 aircraft. While the AI bet inflates bit-moving companies, Amazon uses automation to reduce friction in its core retail and fulfillment businesses.
Workforce Reduction via Automation
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(00:07:38)
  • Key Takeaway: Automation is already reducing the required human workforce per facility, with Amazon aiming to automate up to 75% of its warehouse operations by 2027.
  • Summary: The average number of employees per Amazon facility dropped to the lowest level in 16 years last year, even as employees handle 22 times more packages than a decade ago. The company projects avoiding the hiring of 160,000 workers in the U.S. by 2027 due to automation.
Specific Robotics Milestones
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(00:08:47)
  • Key Takeaway: Amazon deployed its millionth robot worker in June and is on pace to have more robots than humans in warehouses by year-end.
  • Summary: Key robotic systems include Hercules for heavy carts, Pegasus for sorting, and Sparrow, a robotic arm designed to replace human pickers. DeepFleet uses AI to coordinate robot movement, improving fleet travel time by 10%.
Automation’s Societal Impact
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(00:14:24)
  • Key Takeaway: Automation in logistics represents a massive wealth transfer from Amazon’s workers to shareholders and customers, potentially displacing 600,000 jobs by 2033.
  • Summary: Leaked documents suggest Amazon hopes to automate away 600,000 jobs by 2033, with studies indicating that adding one robot reduces local employment by six workers. Current tax policies, like permanent 100% bonus depreciation for automation equipment, prioritize robot birth over worker support.