In this article, we discuss 14 best robotics stocks to buy now.
In 2023, the global robotics market was valued at $46.0 billion. IMARC Group anticipates substantial growth, projecting the market to reach $169.8 billion by 2032. This forecast indicates a robust compound annual growth rate (CAGR) of 15.1% during the period from 2024 to 2032. The robotics market’s expansion is attributed to significant technological advancements in artificial intelligence and machine learning, a surge in demand for automation due to increasing labor shortages and rising labor costs, government initiatives and funding, and the expanding application areas of robotics.
The adoption of robotics has, in fact, doubled in the last six years, setting the stage for further acceleration. According to a 2022 report by the International Federation of Robotics, at least 3.5 million industrial robots were operational in manufacturing factories worldwide as of 2021, and industrial robot installations reached an all-time high. The investment in industrial robots has been on an upward trajectory since 2010, driven by manufacturers aiming to reduce production costs. Recent developments indicate that the impact of robotics is poised to extend beyond manufacturing into different industries. Notably, in the health sciences and wellness sector, robots are increasingly being deployed in operating rooms, clinical settings, and research laboratories to automate manual, repetitive, and high-volume tasks. With evolving technologies, robots are expected to operate more autonomously, eventually performing certain tasks entirely on their own.
The high capital expenditure and retraining costs associated with automation through robotics have historically limited efficiency gains to larger companies. However, this scenario is changing, especially for small and medium-sized enterprises (SMEs). The average price of an industrial robot has decreased by half over the last decade, dropping from $47,000 in 2011 to approximately $23,000 in 2022. Forecasts by ARK Invest suggest a further 50% to 60% reduction in costs by 2025. Moreover, new business models, such as robotics-as-a-service, are enhancing accessibility by mitigating upfront capex costs through lease agreements.
The past five years, marked by the COVID-19 pandemic and geopolitical tensions, have underscored the vulnerability of globalized supply chains, especially for businesses relying on intricate components like semiconductors. In response, a significant number of European (74%) and US (70%) businesses intend to reshore or nearshore their operations, as indicated by a 2022 survey by ABB Robotics. A substantial portion of these businesses (75% in Europe and 62% in the US) plan to invest in robotic automation within the next three years. Legislative acts like the US CHIPS and Science Act and Inflation Reduction Act further signify the trend toward reshoring manufacturing, either through incentives or mandates. Amid widely reported labor shortages, particularly in manufacturing, there is a clear opportunity for automation and robotics. China, aggressively pursuing robotics in the last decade, surpassed the US in technology adoption in 2021, illustrating the impact of this trend.
Bill Gates discussed some groundbreaking robotics initiatives in a GatesNotes blog post at the beginning of 2024. The Microsoft co-founder considers developing machines that mimic human body functions, such as walking, jumping, touching, and gripping objects, to be a greater challenge than advancing artificial intelligence, which already demonstrates daily progress. Gates highlighted his enthusiasm for five robotics startups, starting with Agility Robotics, an American startup that has developed a human-centric, multipurpose robot tailored for logistics work. This robot, approximately the size of a human, can handle heavy loads and express “emotions” through LEDs on its face, enhancing interaction with human colleagues. Another notable initiative is from Tevel, an Israeli startup deploying autonomous flying robots for continuous selective fruit picking, ensuring ripe apples are harvested around the clock. Gates also mentioned Apptronik, whose robots have the potential to assist astronauts on Moon or Mars missions. Gates also praised the Robotics and Mechanisms Laboratory (RoMeLa) at UCLA for its robot capable of navigating rocky, unstable terrain without falling. Lastly, he acknowledged Field AI, a company developing AI-powered software for robots, enabling complete autonomy in various missions. Gates envisions robots, including humanoid models, playing crucial roles in responding to future natural disasters or major health crises like the Covid-19 pandemic. They could manually weed on farms, carry heavy loads in factories, and become essential in healthcare, hospitality, and household settings.
To benefit from the growth potential in the robotics industry, some of the best stocks to invest in include NVIDIA Corporation (NASDAQ:NVDA), Thermo Fisher Scientific Inc. (NYSE:TMO), and Intuitive Surgical, Inc. (NASDAQ:ISRG).
Our Methodology
We chose the top robotics stocks based on overall hedge fund sentiment toward each stock. We have assessed the hedge fund sentiment from Insider Monkey’s database of 910 elite hedge funds tracked as of the end of the third quarter of 2023. The list is arranged in ascending order of the number of hedge fund holders in each firm. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).
A ground-level view of a manufacturing floor, with a robotic arm precisely applying a rivet to a part.
Best Robotics Stocks To Buy Now
14. Rockwell Automation, Inc. (NYSE:ROK)
Number of Hedge Fund Holders: 34
Rockwell Automation, Inc. (NYSE:ROK) is a global provider of industrial automation and digital transformation solutions. The company has three segments – Intelligent Devices, Software & Control, and Lifecycle Services, offering a range of hardware, software, and services. Its solutions cater to automotive, semiconductor, warehousing, and logistics industries. On February 7, Rockwell Automation, Inc. declared a $1.25 per share quarterly dividend, in line with previous. The dividend is payable on March 11, to shareholders of record on February 20.
According to Insider Monkey’s third quarter database, 34 hedge funds were bullish on Rockwell Automation, Inc., compared to 32 funds in the prior quarter. Ken Fisher’s Fisher Asset Management is the leading stakeholder of the company, with 555,938 shares worth approximately $159 million.
Like NVIDIA Corporation, Thermo Fisher Scientific Inc., and Intuitive Surgical, Inc., Rockwell Automation, Inc. is one of the best robotics stocks to invest in.
TimesSquare Capital U.S. Mid Cap Growth Strategy made the following comment about Rockwell Automation, Inc. in its Q3 2023 investor letter:
“In the Industrials sector we gravitate towards business service companies, those focused on automation & efficiency improvements, and essential infrastructure services. Rockwell Automation, Inc. is a new addition this quarter. They provide industrial automation and digital transformation solutions. There is secular growth stemming from a rapid push towards automated and connected manufacturing; as well as offering an offset to rising labor costs.”
13. PTC Inc. (NASDAQ:PTC)
Number of Hedge Fund Holders: 38
PTC Inc. (NASDAQ:PTC) is a software company with a presence in the Americas, Europe, and the Asia Pacific. The company specializes in product development, connectivity, augmented reality, and publishing. PTC Inc. is one of the best robotics stocks to invest in. On January 31, the company reported financial results for the first quarter of fiscal year 2024. PTC announced a non-GAAP EPS of $1.11 and a revenue of $550.21 million, outperforming Wall Street estimates by $0.14 and $12.22 million, respectively. Revenue for the period increased 18.1% on a year-over-year basis.
According to Insider Monkey’s third quarter database, 38 hedge funds were long PTC Inc., compared to 40 funds in the preceding quarter. Stephen Mandel’s Lone Pine Capital is the leading stakeholder of the company, with 3.16 million shares worth $448.6 million.
12. Teradyne, Inc. (NASDAQ:TER)
Number of Hedge Fund Holders: 38
Teradyne, Inc. (NASDAQ:TER) designs, develops, manufactures, sells, and supports automatic test equipment. The company’s offerings include semiconductor test platforms, defense/aerospace test systems, collaborative robotic arms, autonomous mobile robots, and wireless device testing solutions. Teradyne, Inc. is one of the best robotics stocks to monitor. On January 30, the company reported a Q4 non-GAAP EPS of $0.79, beating market expectations by $0.07. The revenue of $671 million, however, fell short of Wall Street estimates by $5.97 million.
According to Insider Monkey’s third quarter database, 38 hedge funds were bullish on Teradyne, Inc., compared to 41 funds in the prior quarter. Cathie Wood’s ARK Investment Management is the largest stakeholder of the company, with 1.42 million shares worth approximately $143 million.
Here is what Carillon Clarivest Capital Appreciation Fund has to say about Teradyne, Inc. in its Q1 2022 investor letter:
“Stock selection contributed the most while sector allocation was also positive. An underweight to communication services and an overweight to energy helped performance, while an underweight to consumer staples and an overweight to materials detracted. Stock selection was strong within healthcare and materials but was weak within information technology and industrials. Teradyne develops and sells self-automatic test systems. The company gave a weak outlook as a major customer slowed its 3-nanometer technology transition. The Fund sold the stock.”
11. Stryker Corporation (NYSE:SYK)
Number of Hedge Fund Holders: 47
Stryker Corporation (NYSE:SYK) is a medical technology company operating in two segments – MedSurg and Neurotechnology, and Orthopaedics and Spine. The Orthopaedics and Spine segment specializes in implants for hip and knee joint replacements, trauma, and extremities surgeries, as well as spinal implant products. The MedSurg and Neurotechnology segment provides a range of medical devices and products for various medical specialties, including surgical equipment, navigation systems, emergency medical equipment, and neurotechnology products for minimally invasive endovascular techniques and brain surgeries. Stryker Corporation is one of the best robotics stocks to invest in.
On January 30, Stryker Corporation reported a Q4 non-GAAP EPS of $3.46 and a revenue of $5.8 billion, outperforming $0.19 and $200 million, respectively. Terry Smith’s Fundsmith LLP is the leading stakeholder of the company, with 5.5 million shares worth $1.5 billion.
Baron Health Care Fund stated the following regarding Stryker Corporation in its fourth quarter 2023 investor letter:
“We initiated a position in Stryker Corporation during the quarter. Stryker is a large diversified medical device company with two business segments: (1) MedSurg and Neurotechnology, and (2) Orthopedics and Spine. The stock sold off during the quarter along with many other medical device stocks because of concerns about the impact of GLP-1 weight loss medicines on their business. Specific to Stryker, the concern was that weight loss would reduce demand for hip and knee implant procedures because obesity is one factor that drives osteoarthritis. We think this concern was overstated and saw the sell-off as an opportunity to buy a high-quality growth company at a reasonable valuation. We think Stryker is well positioned with its broad product portfolio to benefit from the trend of more orthopedic and other medical procedures moving from the hospital to ambulatory surgery centers. The company also has several new product launches coming up that should drive growth. At its recent Investor Day, management provided long-term financial goals including organic sales growth at the high end of the medical technology industry and double-digit EPS growth.”
10. Emerson Electric Co. (NYSE:EMR)
Number of Hedge Fund Holders: 53
Emerson Electric Co. (NYSE:EMR) is a global technology and software company serving industrial, commercial, and consumer markets. It specializes in automation solutions, control systems, and industrial technologies. Emerson Electric Co. is one of the best robotics stocks to buy. On February 7, the company declared a quarterly dividend of $0.525 per share, in line with previous. The dividend is payable on March 11, to shareholders of record as of February 16.
According to Insider Monkey’s third quarter database, 53 hedge funds were bullish on Emerson Electric Co., compared to 49 funds in the prior quarter. John Overdeck and David Siegel’s Two Sigma Advisors is the largest stakeholder of the company, with 3.2 million shares worth $313.4 million.
9. Deere & Company (NYSE:DE)
Number of Hedge Fund Holders: 55
Deere & Company is a global manufacturer and distributor of farming equipment, operating in four segments – Production and Precision Agriculture, Small Agriculture and Turf, Construction and Forestry, and Financial Services. In 2021, the company announced a definitive agreement to acquire Bear Flag Robotics, a Silicon Valley-based startup specializing in autonomous driving technology for existing machines. The $250 million deal aims to expedite the development and deployment of automation and autonomy in farming.
According to Insider Monkey’s third quarter database, 55 hedge funds were long Deere & Company, compared to 56 funds in the prior quarter. Bill & Melinda Gates Foundation Trust is the leading stakeholder of the company, with approximately 4 million shares worth $1.5 billion.
ClearBridge Large Cap Value Strategy made the following comment about Deere & Company in its Q4 2022 investor letter:
“Our industrials holdings produced robust absolute returns for the quarter. While the ISM Manufacturing Index fell in November to contractionary levels, our industrial holdings have largely been able to maintain earnings due to strong competitive positions, historically large backlogs and company-specific drivers. For example, Deere & Company continues to benefit from a strong upgrade cycle as record farmers’ income is driving broad and rapid adoption of the company’s precision agricultural equipment.”
8. Medtronic plc (NYSE:MDT)
Number of Hedge Fund Holders: 59
Medtronic plc (NYSE:MDT) ranks 8th on our list of the best robotics stocks. Medtronic plc (NYSE:MDT) is a global medical technology company that develops, manufactures, and sells device-based medical therapies worldwide. Medtronic has been involved in the development and implementation of robotic-assisted surgery technologies, particularly in areas such as minimally invasive surgery and robotic-assisted spine procedures.
On November 21, Medtronic plc (NYSE:MDT) announced financial results for the second quarter of fiscal year 2024. The company reported a non-GAAP EPS of $1.25 and a revenue of $8 billion, outperforming Wall Street estimates by $0.07 and $80 million, respectively.
According to Insider Monkey’s third quarter database, 59 hedge funds were bullish on Medtronic plc (NYSE:MDT), compared to 63 funds in the last quarter. Jean-Marie Eveillard’s First Eagle Investment Management is the biggest stakeholder of the company, with 6 million shares worth $477 million.
Appleseed Fund made the following comment about Medtronic plc (NYSE:MDT) in its Q1 2023 investor letter:
“During the most recent quarter, Appleseed Fund added three new equity holdings: Medtronic plc (NYSE:MDT), Stanley Black & Decker (SWK), and Synovus Financial (SNV). Medtronic is the world’s largest device manufacturer, and it holds the number one or number two market share in most of its product segments. Medtronic’s business is heavily weighted towards complicated in-patient procedures, which are typically quite profitable. Industry dynamics are quite attractive with an aging global population and the growth of improved healthcare in emerging markets; furthermore, most of its segments are highly concentrated with just 2-3 players that split each segment’s market share, affording the key participants with significant economies of scale and pricing power. The Company has been recently addressing several temporary headwinds including a strong dollar, inflation, a delayed recovery in surgical volumes from the coronavirus pandemic, and supply chain issues. Once these issues reach the rearview mirror, the Company’s growth and margin expansion plans should transform into reality.”
7. Honeywell International Inc. (NASDAQ:HON)
Number of Hedge Fund Holders: 60
Honeywell International Inc. (NASDAQ:HON) is a global technology and manufacturing company operating through Aerospace, Honeywell Building Technologies, Performance Materials and Technologies, and Safety and Productivity Solutions segments. Honeywell Robotics provides intelligent robotic solutions designed for transport, order picking, palletizing, and depalletizing. Their warehouse automation solutions are engineered to meet the increasing operational demands of high-performance distribution, fulfillment, and manufacturing processes.
According to Insider Monkey’s third quarter database, Honeywell International Inc. was part of 60 hedge fund portfolios, compared to 61 in the prior quarter. Phill Gross and Robert Atchinson’s Adage Capital Management is the largest stakeholder of the company, with 1.8 million shares worth $346.3 million.
6. RTX Corporation (NYSE:RTX)
Number of Hedge Fund Holders: 63
RTX Corporation (NYSE:RTX) is an aerospace and defense company operating globally, operating through Collins Aerospace, Pratt & Whitney, and Raytheon segments. Collins Aerospace provides aerospace and defense products and services, Pratt & Whitney supplies aircraft engines, and Raytheon focuses on threat detection and mitigation. In September 2010, RTX developed the XOS 2 exoskeleton, also known as the ‘Iron Man’ suit, for the US Army, with a public demonstration held at its research facility in Salt Lake City, Utah.
On February 2, RTX Corporation declared a quarterly dividend of $0.59 per share, in line with previous. The dividend is payable on March 21, to shareholders of record on February 23.
According to Insider Monkey’s third quarter database, 63 hedge funds were long RTX Corporation, compared to 56 funds in the last quarter. Ken Fisher’s Fisher Asset Management is the leading stakeholder of the company, with 9.4 million shares worth nearly $682 million.
In addition to NVIDIA Corporation, Thermo Fisher Scientific Inc., and Intuitive Surgical, Inc., RTX Corporation is one of the top robotics stocks to buy. It ranks 6th on our list of the best robotics stocks.
Matrix Asset Advisors made the following comment about RTX Corporation in its Q3 2023 investor letter:
“In Q3, we started a new position in RTX Corporation, formerly Raytheon Technologies, an aerospace and defense company that provides advanced systems and services for commercial, military and government customers worldwide. The company was formed in 2020 through the combination of Raytheon Company and the United Technologies Corporation aerospace businesses. We had previously owned United Technologies and were impressed with their CEO, Greg Hayes, now the CEO of RTX. The opportunity to purchase RTX came after the company disclosed a problem with an engine component that will result in a significant charge to inspect and replace. This is a fixable issue requiring time and money, but we believe the price decline provided a good opportunity to start a position in this highly profitable, well-managed company.”
5. Splunk Inc. (NASDAQ:SPLK)
Number of Hedge Fund Holders: 67
Splunk Inc. (NASDAQ:SPLK) develops and markets cloud services and licensed software solutions. Its unified security and observability platform includes Splunk Security for cyber risk mitigation and compliance, and Splunk Observability for visibility across infrastructure, applications, and customer experience. The Splunk App supports robotic process automation (RPA) deployment for companies like UiPath Inc. (NYSE:PATH). Splunk Inc. is one of the best robotics stocks to buy.
On November 28, Splunk Inc. reported a Q3 GAAP EPS of $0.55 and a revenue of $1.07 billion, outperforming Wall Street estimates by $0.42 and $40 million, respectively.
According to Insider Monkey’s third quarter database, 67 hedge funds were bullish on Splunk Inc., compared to 50 funds in the prior quarter. Matthew Halbower’s Pentwater Capital Management is the largest stakeholder of the company, with 2.5 million shares worth $370.45 million.
ClearBridge Mid Cap Growth Strategy made the following comment about Splunk Inc. in its Q3 2023 investor letter:
“Stock selection in the IT sector was the main detractor during the quarter, as the prospect of a higher-for-longer rate environment weighed on longer-duration, higher growth stocks. Despite these challenges, there were also strong positive contributions from Splunk Inc. and AppLovin. Splunk’s price rallied on the news of its acquisition by Cisco, and investors applauded AppLovin’s new, AI-enabled platform which is improving productivity in its mobile games ad network.”
4. General Electric Company (NASDAQ:GE)
Number of Hedge Fund Holders: 76
General Electric Company (NASDAQ:GE) is a high-tech industrial company operating in Europe, China, Asia, the Americas, the Middle East, and Africa. The Robotics team at GE Research envisions service robots that collaborate closely with humans, handling tedious, dirty, and hazardous tasks. Intelligent industrial service robots are seen as the next significant industrial tool, amplifying human capabilities, enabling faster and safer operations in previously inaccessible areas, and possessing cognitive and physical abilities beyond our current imagination. General Electric Company is one of the best robotics stocks to invest in.
On January 23, General Electric Company reported a Q4 non-GAAP EPS of $1.03 and a revenue of $19.4 billion, outperforming Wall Street estimates by $0.13 and $1.85 billion.
According to Insider Monkey’s third quarter database, 76 hedge funds were bullish on General Electric Company, compared to 71 funds in the preceding quarter. Chris Hohn’s TCI Fund Management is the largest stakeholder of the company, with 41.65 million shares worth $4.60 billion.
Longleaf Partners Fund stated the following regarding General Electric Company in its fourth quarter 2023 investor letter:
“General Electric Company – Industrial conglomerate General Electric (GE) was the top performer for the year. We exited this multi-year investment as its price went above our appraisal. In 1Q23, GE spun out GE Healthcare, which we sold as it traded at our value. The share price continued its strong performance throughout the spring and summer, and we ultimately sold the position in the third quarter when we no longer saw a margin of safety for the business. CEO Larry Culp was a great partner who created significant value for shareholders by reducing leverage, cutting costs, streamlining operations, improving company culture and simplifying the structure with plans to split the company into three businesses. We hope to have the opportunity to partner with him again in the future.”
3. Intuitive Surgical, Inc. (NASDAQ:ISRG)
Number of Hedge Fund Holders: 78
Intuitive Surgical, Inc. develops and manufactures medical products, particularly the da Vinci Surgical System, a robotic surgical system facilitating minimally invasive procedures for physicians worldwide. It is one of the best robotics stocks to monitor. On January 23, Intuitive Surgical, Inc. reported a Q4 non-GAAP EPS of $1.60 and a revenue of $1.93 billion, outperforming Wall Street estimates by $0.11 and $30 million, respectively.
According to Insider Monkey’s third quarter database, 78 hedge funds were long Intuitive Surgical, Inc., compared to 68 funds in the prior quarter. Ken Fisher’s Fisher Asset Management is the largest stakeholder of the company, with 4.40 million shares worth $1.28 billion.
Baron Health Care Fund stated the following regarding Intuitive Surgical, Inc. in its fourth quarter 2023 investor letter:
“Additional tailwinds to performance came from robotic surgical system pioneer Intuitive Surgical, Inc.. We believe Intuitive Surgical will continue to innovate and launch new products that enhance surgical outcomes, and we think the company has a long runway for growth.
Intuitive Surgical, Inc. sells the da Vinci surgical robotic system for minimally invasive surgical procedures. The stock rose on investor speculation that the company could launch a new robotic system in 2024. We believe Intuitive Surgical will continue to innovate and launch new products that enhance surgical outcomes, and we think the company has a long runway for growth.”
2. Thermo Fisher Scientific Inc. (NYSE:TMO)
Number of Hedge Fund Holders: 109
Thermo Fisher Scientific Inc. is a global provider of life sciences solutions, analytical instruments, specialty diagnostics, and laboratory products, serving diverse markets including pharmaceutical, biotechnology, academic, government, environmental, and healthcare. The company supplies robots designed to automate intricate research tasks in laboratories, requiring adaptability, optimal space utilization, and smooth integration with laboratory peripherals. Thermo Fisher Scientific Inc. is one of the best robotics stocks to buy.
On January 31, Thermo Fisher Scientific Inc. reported a Q4 non-GAAP EPS of $5.67 and a revenue of $10.89 billion, outperforming Wall Street estimates by $0.02 and $160 million, respectively.
According to Insider Monkey’s third quarter database, 109 hedge funds were bullish on Thermo Fisher Scientific Inc., compared to 103 funds in the prior quarter. Chris Hohn’s TCI Fund Management is the largest stakeholder of the company, with 3.19 million shares worth $1.6 billion.
Weitz Partners III Opportunity Fund made the following comment about Thermo Fisher Scientific Inc. in its second quarter 2023 investor letter:
“Portfolio activity this quarter included opportunistically initiating a position in life sciences tool and equipment maker Thermo Fisher Scientific Inc., a long-time holding of other Weitz portfolios, at an attractive valuation.”
1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 180
NVIDIA Corporation is a global provider of graphics, compute, and networking solutions with a diverse product portfolio. NVIDIA provides a comprehensive robotics platform for the training, advancement, and large-scale deployment of AI-enabled robots. Over 1.2 million developers and 10,000 customers, including Amazon Web Services, Cisco, John Deere, Medtronic, Pepsico, and Siemens, have opted for NVIDIA’s robotics solutions. It is one of the best robotics stocks to buy.
On February 9, NVIDIA Corporation announced that it is establishing a new business unit to create customized chips for cloud computing firms, focusing on advanced AI processors. Key players in generative AI, such as OpenAI, Microsoft, Alphabet, and Meta Platforms, are vying for access to NVIDIA chips to stay competitive in the evolving AI landscape.
According to Insider Monkey’s third quarter database, 180 hedge funds were long NVIDIA Corporation, compared to 175 funds in the prior quarter. Rajiv Jain’s GQG Partners is one of the largest stakeholders of the company, with 14 million shares worth $6.10 billion.
Polen Focus Growth Strategy stated the following regarding NVIDIA Corporation in its fourth quarter 2023 investor letter:
“Apple and NVIDIA Corporation alone drove over 1,100 basis points of the Russell 1000 Growth Index’s 42% return, so not owning them was a meaningful headwind to our relative return in 2023. NVIDIA shares rocketed higher by well over 200% in 2023 although they slightly underperformed our Portfolio and the Russell 1000 Growth in the fourth quarter. Generative AI has been a huge boon for NVIDIA as the use of LLMs like ChatGPT and others requires tremendous processing power that, today, is mostly provided by NVIDIA’s GPUs. All large cloud service providers, AI factories, and many large consumer internet companies are laying the foundation for generative AI by deploying NVIDIA GPUs and other parallel processing chips to be able to do large scale generative AI either for internal use (i.e., Meta) or as a service for others (i.e., AI factories) or both (cloud service providers such as Amazon, Microsoft, and Google).
Given many of NVIDIA’s customers or its end customers are still very much in the experimentation phase with generative AI, it is unclear how sustainable the current demand for GPUs truly is. At the same time, it is known that NVIDIA has historically been highly cyclical. By the end of 2024, we believe NVIDIA will already account for roughly half the market for datacenter chips, servers, and networking equipment, which is unprecedented. Even though the valuation at 25x forward earnings doesn’t look very demanding at first glance, it assumes NVIDIA will own virtually the entire datacenter chip market in just the next few years and will sustain year-on-year growth despite being a cyclical business that is currently experiencing much higher new peaks.
We believe NVIDIA is a highly advantaged business, but we also believe the long-term growth outcomes are currently too variable, and the expectations built into the company’s $1.2 trillion valuation as of this writing assume the most optimistic of those scenarios.”
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This article is originally published at Insider Monkey.
