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Is Rockwell Automation (ROK) the Best Automation Stock to Buy According to Hedge Funds?

We recently published a list of 12 Best Automation Stocks To Buy According to Hedge Funds. In this article, we are going to take a look at where Rockwell Automation, Inc. (NYSE:ROK) stands against other best automation stocks to buy according to hedge funds.

The rise of generative AI has skyrocketed automation, while robotics are disrupting industrial automation. On the other hand, supply chain automation has reshaped traditional operations from removing warehousing bottlenecks to inventory management, and demand forecasting. In inventory tracking, advanced warehouse management networks, powered by AI and ML algorithms, assist in optimizing inventory placement, resource allocation, route planning, and more.

Robotics a Key Segment to Automation

Professional service robot sales soared by 30% in 2023, according to the International Federation of Robotics (IFR). IFR’s statistics department data shows that over 205,000 robotics units were sold in 2023, with Asia-Pacific accounting for 80% of global robotics sales. Transportation and logistics service robots sales accounted for 113,000 units in 2023, a rise of 35% from 2022. In addition to that, Medical robots are in huge demand, and medical robot sales soared by 36% to nearly 6,100 units in 2023.

Apart from robotics, quantum computing is revolutionizing various industries. Other technologies including virtual reality (VR), augmented reality (AR), big data, data analytics, and 5G technology are key to driving automation across various segments.

Global X Robotics & Artificial Intelligence ETF (NASDAQ:BOTZ) and Robo Global Robotics and Automation Index ETF (NYSE:ROBO) have surged more than 11% and 8.50% over the last year, respectively. Considering the growing demand for automation systems and robotics, automation stocks hold much promise.

Our Methodology

We used automation and robotics ETFs along with online rankings to shortlist an initial list of automation stocks. We then selected the 12 automation stocks that were the most widely held by hedge funds. The list is sorted in ascending order of the number of hedge fund holders, as of Q3 2024.

Why do we care about what hedge funds do? 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

A technician in a factory setting next to an industrial automation machine.

Rockwell Automation, Inc. (NYSE:ROK)

No. of Hedge Fund Holders: 38

Rockwell Automation, Inc. (NYSE:ROK) is a leading industrial-grade technology firm that is well-positioned in the automation segment. The company’s flagship products such as Allen Bradley and FactoryTalk provide production monitoring and easy application of ML concepts to solve product quality problems while maximizing process integrity. The company offers industrial automation and information solutions through two segments: Architecture & Software and Control Products & Solutions.

Rockwell Automation, Inc. (NYSE:ROK)’s products and services serve a wide range of industries including, food and beverage companies, energy and chemical producers, and auto manufacturers. The company is working in collaboration with companies such as NVIDIA to advance process automation and offer live services to industrial clients while addressing workforce shortages.

On January 16, Stephens & Co. analyst Tommy Moll raised the price target on ROK shares from $275 to $350, upgrading the rating from Equal-weight to Overweight. Moll believes that it is a good time to buy Rockwell Automation, Inc. (NYSE:ROK), considering the rising visibility of sales and earnings returning to growth by the second half and initiating a reinvigorated cost-management and operational excellence program. The analyst also pointed out that stocks like Rockwell “rarely come cheap,” but ROK seems to outperform the market during the early phase of earnings recoveries.

Overall, ROK ranks 9th on our list of best automation stocks to buy according to hedge funds. While we acknowledge the potential of ROK to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ROK but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap

Disclosure: None. This article is originally published at Insider Monkey.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

A few years from now, you’ll wish you’d owned this stock.

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Wall Street calls this $3 stock a “Melting Ice Cube.” They said the same thing about BTI before it returned 90%.

Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

My name is Inan Dogan. I’m the co-founder and Research Director of Insider Monkey. I have an important message for you today.

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We alerted our subscribers, and BTI returned 90% in just 16 months.

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Today, we have identified a nearly identical pattern in a digital-first giant trading at $3.

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