In this article, we will take a look at some of the best robotics and automation stocks that appear attractive.
On June 3, CNBC spoke with Softbank CEO Masayoshi Son and Barclays’ Head of Thematic FICC Research Zornitza Todorova. The discussions revolved around the continued advancement of artificial intelligence and robotics.
Son highlighted how humanoid robots have been grabbing headlines due to their applications across various segments. He also reflected on market views projecting a 100-fold expansion of the sector over the next 10 years, driven by improvements in real-time AI capabilities.
On the other hand, Zornitza Todorova from Barclays spoke about structural labor shortages, aging populations, urbanization, and changing job preferences, which are leading to extensive adoption of automation technologies. She expected the market to reach around the $200 billion mark by 2035, stating:
“Humanoid robotics is really on an upward trajectory. The size of the market today is really small, it’s 2 to 3 billion dollars, but we see it going up to $200 billion in 2035. They’re already doing simple, well-defined tasks like lifting boxes or picking things up from the assembly line, helping to fill roles where there are not that many humans that can do the jobs.”
Todorova believes that during this transformational phase, there is still a lot about humanoid robot capabilities that needs to be understood. She anticipates that as this technology matures, it will become applicable across more service-oriented functions.
With that background, let’s explore our 10 Best Robotics and Automation Stocks to Invest In.
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Our Methodology
To identify relevant stocks for this article, we screened U.S.-listed robotics and automation companies with market capitalizations above $2 billion. Also, we only shortlisted stocks with at least 10% upside potential, according to consensus, as of the June 19 close. Finally, we selected 10 stocks with the highest upside and ranked them in ascending order.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
10. Cognex Corp. (NASDAQ:CGNX)
Cognex Corp. (NASDAQ:CGNX) is one of the 10 best robotics and automation stocks to invest in.
As of the close of play on June 19, consensus sentiment around the stock was moderately bullish. Based on a median 1-year target price of $73.58, it offers an upside potential of over 11%. It was assigned Buy ratings by 9 of the 13 analysts, while the other 4 assigned Hold ratings.
Back in mid-May, DA Davidson increased its target price on Cognex Corp. (NASDAQ:CGNX) from $55 to $62. The firm maintained a Neutral rating on the stock following its first-quarter results. The firm raised its estimates, compelled by stronger prospects for organic growth, a favorable business mix, and the company’s existing operating leverage. DA Davidson reported that the company delivered gross margins in excess of the firm’s projections, and the end market outlook has also gotten better.
Later on May 26, JPMorgan also raised its price target on Cognex Corp.(NASDAQ:CGNX) from $65 to $75 and upgraded the stock from Neutral to Overweight. The adjusted target price results in an upside potential of almost 14%. The firm noted that the company keeps coming up with innovative, AI-backed tools that expand its ability to reach and gain new clients.
Cognex Corp. (NASDAQ:CGNX) sells machine vision devices that automate production and distribution activities by capturing and analyzing visual data. Its portfolio has several products, including software for advanced programming, technology for developing vision applications, and an image-based barcode reader.
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