Amazon.com Inc. (NASDAQ:AMZN) could dramatically expand its same-day delivery network as it takes aim at a key advantage held by Walmart Inc. (NASDAQ:WMT), according to Bank of America analyst Justin Post.

Post reiterated a Buy rating on the stock with a $320 price forecast. He said the company’s proposed Project Mercury could expand its same-day delivery footprint more than tenfold.

Amazon Targets 1,000-Plus Same-Day Facilities

Citing a Business Insider report, Post said Amazon is considering expanding its Sub Same-Day fulfillment network to more than 1,000 facilities by 2031 from 85 today.

The facilities stock about 90,000 of Amazon’s fastest-selling products. That includes household essentials, Fresh items and medicines.

Amazon estimates a three-year investment of $6.8 billion could generate $7.1 billion in economic value over 10 years. The project could become cash-flow positive by 2030.

Taking On Walmart’s Delivery Advantage

Bank of America said the expansion could help Amazon challenge Walmart’s proximity advantage.

Walmart uses about 5,000 stores to support rapid fulfillment. Its network puts fast delivery within 10 miles of 90% of the U.S. population.

Project Mercury could put the company’s same-day capacity within 10 miles of 80% of U.S. Prime members by 2031.

Post said the direct financial returns from Mercury appear modest. However, he views the project as strategically important. The $6.8 billion investment would represent less than 5% of Bank of America’s estimated annual Amazon retail capital spending.

The analyst also expects the company’s denser fulfillment network and continued automation to support retail margin improvement for several years. He added that progress across AWS, chips and Bedrock leaves Amazon positioned to benefit from AI in both cloud computing and retail.

AMZN Stock Price Activity: Amazon.com shares were up 2.30% at $251.61 at the time of publication on Thursday, according to Benzinga Pro data.

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