With the upward trajectory of industries adopting robots and automation, it is best time for investing in robotics stock
Robots today, are most definitely helping humans. Apart from hurried yet precise work at assembly lines, they are also toiling in dangerous, dull settings – much to our relief and safety. From tiny surgeon robotic assistants, to supplies delivery to recycling, the wide applications of robotics has earned robots huge demand across industry verticals. Robots are also being used in the military, space exploration, under water exploration, harvesting crops, fixing oil spills and fighting crimes too. Hence, it is no wonder that robot stocks had beaten the S&P 500 over the past decade.
At present, robots are positioned to propel its market to new heights. Thanks to new applications, software, and an advancement of connected technologies.
Robotics stocks come from companies involved in the conception or construction of robots. According to Finder, they include:
• Core automation and production. Focused on the development and construction of robots and automated processes.
• Robot technology. Specialized in specific segments of the robot market, like vision systems, sensors and video compression.
• Industrial software.Developing industrial software solutions that enable automated robotic processes.
• Robotic integration.Using robotics to enhance their product offerings, like domestic appliances, farming equipment and aircraft systems.
Last year, several robotic companies made great strides in terms of innovation, raising money or bringing timely applications that have made them relevant in the near future. A report posted by PR Newswire revealed that the robotics market will be worth US$73 billion by 2025, and the current pandemic decreased the initial growth projections only by 3%. Meanwhile, there has been an increased interest among business leaders to adopt digital transformation. This surge in digital uptake will boost the robotics industry forwards, shaping its contribution to businesses in coming years. NASDAQ believes that even if the robotics industry grows at 15% to 20% in the next five years, it can be considered as an exciting investment theme.
Currently, ABB is among the top stock robotics that provides the facility of machine and factory automation. NVIDIA Corporation is also another big name in robotics stock industry owing to their graphics processing unit (GPU) technology that enables AI in self-driving cars, gaming, the cloud, Big Data and many other areas.
As countries like USA, China, Germany, Japan and others continue to rise to prominent status in a world-leading startup and technology ecosystem, investment have also continued to flow into robotics sector. Since the robotics trend is still in its infancy, buying the right stocks this early in the game could result in massive returns for investors. Some promising ones include:
ABB (NYSE:ABB)
ABB has significant presence in the robotics industry. The company has installed 400,000 robots in 53 countries. ABB focuses on industrial robots with service offering for a wide variety of industries. This includes automotive, healthcare, logistics, solar and plastics. A new robotics manufacturing and research facility from ABB is in plans to open in China soon.
iRobot (NASDAQ:IRBT)
iRobot is a consumer robot company that designs and builds robots. The iRobot portfolio includes concepts in mapping, navigation, mobility and artificial intelligence. It offers Roomba floor vacuuming robots; Braava family of automatic floor mopping robots; Terra robotic lawn mower products; and Root robots designed to help children learn how to code.
Teradyne (NASDAQ:TER)
Few years ago, semiconductor manufacturer Teradyne made into headlines with its US$285 million acquisition of Universal Robots. The company also witnessed promising business revival in the second half of 2020. Other strategic acquisitions, include Energid Technologies and MiR. Teradyne is working to build “the world’s largest collaborative robotics hub” in Denmark.
It is important to note that while robotics stocks has promising future, and are easy to invest, they are not without risks. For instance, buying stock in individual companies includes a greater risk when you lose to a newer, flashier competitor. At the same time, given the market competition, the newly hatched startups may lack the capital and resources of better-established companies. Further, robotics only represents a small piece of the overall revenue for large cap players. Companies like Tesla, Alphabet Inc, etc. will witness a strong rise this year, considering the exciting innovations from them.
So, whether one invests in a major multinational enterprise or a tiny startup’s IPO, research before buying is essential. Investors should also pay close attention to news releases and future annual reports.
