We recently compiled a list of 10 Stocks That Will Change the World. In this article, we are going to take a look at where Rockwell Automation Inc. (NYSE:ROK) stands against the other stocks.
If we were to try and summarize one of the biggest ways how to make money on the stock market, it’d include buying stocks of firms that have changed the world. The biggest and most valuable companies of today didn’t start that way, and those who had a chance to invest in them decades back are considerably well off and some are even among the richest people in the world.
In fact, the two biggest technologies that have changed the world since the 1970s are personal computing and the Internet. Within these, the former is older and started through the launch of products such as Windows and the Mac. The two companies that make these products are up by 405,920% and 166,238% on the stock market since their shares were listed. So, if you, or anyone you know, had bought $1,000 of shares back then, your investment would be worth $4 million or $1.7 million today.
Along with personal computing, the Internet is the second world changing technology that has not only reformed the way in which businesses operate and regular people live their lives but also left a slew of billionaires in its wake. Starting from the dotcom era of the 1990s, the few companies that did survive the ‘pop’ are among the largest and most valuable in the world today. These have managed to use the power of the Internet to change the way people shop and access information. The former, founded by Jeff Bezos, whose latest net worth is estimated to sit at $190 billion, is up 185,389% since its stock started trading.
A $1,000 investment back then would be worth $1.9 million. Similarly, the world’s largest search engine company and the world’s biggest social media firm, are up by 5,939% and 1,254% since their stock started trading in the 2000s. It’s a testament to the power of world changing technologies to drive stock prices that these quad digit percentage returns appear to be ‘meager’ when compared to the six digit returns of the world changing stocks that have been trading since the 1970s and the 1990s.
But what about 2024? After all, while these disruptive stocks have made their mark on Wall Street history, it is highly unlikely that they will yield similar returns in the future. Well, one disruptive technology that has caught the world by storm is artificial intelligence. Spurred by the public launch of the chatbot ChatGPT, AI’s proponents swear that it will transform the world just like the Internet did. This transformation is being spearheaded by big tech, as the largest technology companies in the world fork out billions of dollars in AI spending.
Data shows that during the first half of 2024, the four biggest AI players spent a whopping $106 billion in spending as part of a game theory-esque roulette that Mark Zuckerberg described as risking “building capacity before it is needed, rather than too late.” As for the future, analysts expect that AI spending over the next five years could touch a whopping $1 trillion. This spending has also driven the shares of the world’s pre eminent AI GPU maker (and the youngest game changing stock) to rise by 261,775% since they started trading.
Looking at these gains makes it even more important that we try to wager a guess at what future industries can change the world. One way to somewhat simplify our research is to look at what investment newsletters are saying. The writers of these newsletters are often on the hunt for high growth sectors since correctly identifying them leads to a boost of credibility that drives subscriptions and eventually leads to revenue. On this front, we looked at some such industries as part of our coverage of 10 Stocks That Will Skyrocket.
Within these industries, two that stand out are quantum computing and nuclear energy. For those out of the loop, quantum computing is an expansion of current computing as it significantly increases the data that a computer can compute. However, quantum computing stocks are laggards in the stock market. We covered top hedge fund quantum computing stock picks during our coverage of 12 Best Quantum Computing Stocks To Invest In. Out of these 12 stocks, 10 either have quantum computing returns baked into their stock price or are too important in the industry to ignore. Analyzing their year to date performance reveals that out of these ten quantum computing stocks, four are in the green and this drops to three if we focus only on pureplay quantum computing stocks. These three stocks rank 5th, 7th, and 12th on our list, and they are up by 2.7% to 129.75%, year to date.
For nuclear energy, let’s look at the stocks that are part of the list of the 12 Best Nuclear Energy Stocks To Buy Today. In this list, roughly seven nuclear energy stocks have considerable exposure to power generation. Their one year share price appreciation ranges between 79.8% to 11.38%, and the top three performing stocks are ranked 3rd, 5th, and 12th. As a refresher, nuclear energy is popular these days because of its potential to provide clean energy to AI data centers.
Finally, another sector that might change the world is robotics. Some Wall Street analysts are gushing over the sector as they believe that humanoid robots in particular can unlock a $30 trillion opportunity. This is on the back of these robots being able to perform jobs that humans are unwilling or unsuited for, and even Elon Musk is bullish on them as he believes that his car company could benefit from this unstoppable demand and become worth $25 trillion as a result. For more details, you can check out $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley.
Our Methodology
To make our list of the stocks that can change the world, we started with our coverage of 10 Stocks That Will Change the Future, analyzed their performance, and fine tuned the list to align with today’s hottest industries. Then, we scanned media reports for sectors such as AI, self driving, gene editing, weight loss drugs, and robotics. From these reports, a stock was chosen if it was mentioned in three or more reports. This yielded a final list of five new stocks.
For these stocks, we have also mentioned the number of hedge fund investors. 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 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)
Number of Hedge Fund Holders In Q1 2024: 39
Rockwell Automation Inc. (NYSE:ROK) is a sizeable American industrial machinery company with some exposure to robotics. However, it isn’t part of Morgan Stanley’s Humanoid 66 list of firms that benefit from humanoid robots, and the stock is also down by 14% over the past twelve months. As part of our research for this piece, out of the multiple media reports we analyzed for the top robotics stocks, Rockwell Automation Inc. (NYSE:ROK) was present in only one – the lowest for all the robotics stocks in last year’s list. Rockwell Automation Inc. (NYSE:ROK)’s stock tanked by ~18% in January 2024 when its EPS and revenue of $2.04 and $2 billion missed analyst estimates of $2.64 and $2.1 billion, respectively. The shares were in more trouble in August after the firm continued to struggle and its third quarter profit slipped because of supply chain issues.
Overall ROK ranks 10th on our list of stocks that will change the world. While we acknowledge the potential of ROK as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. 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.
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Disclosure: None. This article is originally published at Insider Monkey.