Amazon has abruptly terminated plans to launch its commercial drone delivery service in Italy. The decision, announced on Sunday, comes just months after the successful completion of test flights in December 2024. The company cited an unsupportive regulatory environment for its long-term objectives as the official reason for the withdrawal. However, Italy’s civil aviation authority, ENAC, expressed surprise at the rationale, suggesting internal cost-cutting measures were the more likely cause.
Strategic Pivot to Core, Profitable Segments
This move aligns with a broader strategic realignment at the e-commerce giant. While the “Prime Air” program continues to operate in select U.S. locations, including Texas and Arizona, Amazon is increasingly concentrating its efforts on its most profitable core businesses. Recent financial performance underscores this focus. For the third quarter of 2025, Amazon reported a 13% increase in revenue, reaching $180.2 billion. A standout performer was Amazon Web Services (AWS), where growth accelerated to 20%, fueled by exploding demand for AI infrastructure.
The company’s capital expenditure plans for 2025, totaling approximately $125 billion, are predominantly directed toward data centers and AI chips, clearly signaling its priorities. Furthermore, advertising revenue—a highly profitable segment that doesn’t require risky logistics experiments—jumped 22% to $17.7 billion.
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Logistics Independence and Market Confidence
The Italian drone program’s cancellation occurs as Amazon aggressively expands its in-house logistics capabilities. This growing self-reliance was highlighted by a recent announcement from UPS, which plans to reduce its Amazon-related shipping volume by more than 50% by the end of 2026. Amazon can afford this shift because its own delivery network now handles the bulk of the load. In this context, experimental niche projects like Italian drone deliveries no longer fit the picture of a streamlined, efficiency-driven logistics chain.
The market appears to endorse this disciplined approach. Of 74 analysts covering the stock, 96% maintain a buy recommendation, with an average price target of $300. Shares traded steadily around $232 on Monday, giving the company a market capitalization of $2.49 trillion and a price-to-earnings ratio of approximately 33.
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