Robotics stocks are shares in the companies leading the automation revolution. But are we poised for a robot revolution? Find out here.
- What are robotics stocks
- Types of robotics stocks
- Should I invest in robotics?
- How to invest in robotics
- Robotics companies to watch in 2023
What are robotics stocks?
Robotics stocks are publicly listed companies involved in the robotics industry. As robots play an increasingly important role in our lives – and the global economy – they’ve come into renewed focus from investors.
Many key robotics companies, including perhaps the best known of all, Boston Dynamics, aren’t available to trade. But there is still plenty of opportunity across the sector for investors and traders alike.
Types of robotics stocks
Robotics is a big field, and there’s a lot of variation among the players within. Before you decide to buy or sell robotics stocks, it’s worth researching the different types of companies you’ll encounter.
Here are a few key areas that comprise the industry.
Medical robotics companies
Medical robotics companies make machines that support surgical and healthcare processes, helping medical professionals complete procedures faster and with greater precision. Robots in this area tend to be divided into two categories: surgical robots and medical robots.
The latter is a varied category, covering machines that help with diagnosis, rehabilitation, transport and more.
Industrial robotics companies
Industrial robotics companies, on the other hand, make machines that perform various tasks in manufacturing. As automation takes over global industry, these are the businesses are the forefront of the next industrial revolution – driving prices down and enabling increased personalisation.
Security robotics companies
You’ve guessed it – security robotics companies make robots for the security and defence sector. This includes both consumers and militaries, giving stocks in this area a very broad scope. BAE Systems, for example, has a very different customer base than a consumer security firm.
Companies supporting the robotics industry
Beyond these pure-play robotics stocks lay the companies that supply and service the businesses producing automated machinery.
Nvidia, for example, is a leading maker of graphics processing units, used in everything from healthcare robotics to self-driving cars. It might not make any robots in-house, but Nvidia will make more profit when the industry grows and could struggle if it shrinks.
Should I invest in robotics?
Robotics can be an exciting area to invest in. The technology has been growing in usefulness and sophistication for a long time, and many analysts believe that this growth is set to skyrocket in the coming years.
Technological breakthroughs plus an imperative need to address issues such as climate change and an ageing population could see businesses and consumers embrace automation on an unprecedented scale.
However, whether that mass adoption arrives in the next 12 months remains to be seen. As we’ve seen, robotics has been growing for decades, often failing to match the expectations set by analysts and consumers. Humans have been anticipating a robotised future just around the corner for decades, is now the time for it to arrive?
If anything, 2023 has been dominated by a different 'next gen' tech revolution: artificial intelligence. Some will hope, though, that we are on course for robotics to take the markets by storm just as AI has.
If you’re a robo-sceptic, you could consider shorting stocks in the sector. With traditional investing, this can be tricky – especially as many robotics companies don’t offer the same liquidity as blue-chip shares. For CFD traders, however, going short just means selling instead of buying when you open your trade.
Robotics stocks to watch in 2023
The robotics sector offers a lot of diversity for investors, operating across verticals and with vastly different participants. Here are seven companies to consider, listed from biggest to smallest.
Market cap: $760 billion
Several US tech majors are making tentative steps into robotics – including Alphabet, with its ‘Everyday Robots’ initiative – but Tesla has perhaps made the biggest splash so far. The company first announced its humanoid robot Optimus at the 2021 Tesla AI Day, and a year later was able to show a working prototype.
These are early days, however. The prototype was unable to walk or even stand, although another robot (called Bumble-C) did walk across the stage. Many robotics experts compared Optimus unfavourably to other work by leading companies.
For the foreseeable future, then, Tesla remains an electric vehicle company first and foremost. But if it is able to get a useful humanoid robot to market at a competitive price (with Musk claiming Optimus would cost less than a car) then robots could be pivotal to Tesla’s future.
TSLA stock had a terrible 2022. It started the year close to a record high at $382 and ended it down 67% at $123 – the company’s worst year since it went public. In 2023, though, it has recovered as part of a general tech bull market – though remains some way off its record high.
Intuitive Surgical (NASDAQ:ISRG)
Market cap: $96 billion
One of the biggest pure-play robotics companies is Intuitive Surgical, which makes the da Vinci surgical system, designed for minimally invasive medical procedures. The system is used in prostate removal and cardiac valve repair, as well as renal and gynaecologic surgeries. Currently, there are around 7,000 da Vinci systems used in hospitals across the US, Europe and Asia.
ISRG has a long history on the markets, with an IPO back in 2000, five years after the company was founded in 1995. It is a member of both the Nasdaq 100 (US Tech 100) and the S&P 500 (US SP 500).
The stock saw impressive growth across 2020 and 2021, peaking at a market cap of $120 billion before the 2022 bear market saw it struggle.Like Tesla, it has rallied in 2023, partly thanks to a couple of solid earnings reports.
Market cap: $64 billion
ABB is a Swiss-Swedish tech company that specialises in electrical equipment, robotics and automation. Formed out of a merger between Swiss and Swedish companies in 1988, today it is one of Switzerland’s biggest businesses.
While not a pure-play robotics company, ABB is a leading provider of industrial robots via its robotics and discrete automation division. The firm bought B&R in 2017 as its main robotics provider and is a key supplier to the rapidly growing Chinese market.
ABB shares hit a record high in 2023, but have slid in the latter half of the year. It was able to report an 11% revenue rise in its earnings call, but forecast slower growth in the coming months. The stock trades on both the SIX Stock Exchange in Zurich, Nasdaq Stockholm and the New York Stock Exchange.
Market cap: $26 billion (¥3.9 trillion)
FANUC is a Japanese corporation and the largest manufacturer of industrial robots in the world. Its name stands for Fuji Automatic Numerical Control, a hint at the company’s history as a numerical control systems division of Fujitsu back in 1958.
The business began producing robots in the 1980s in a joint venture with General Motors, and still operates a large number of joint ventures to this day. It operates chiefly in the automation of automobile and electronics manufacturing.
FANUC is listed on the Tokyo Stock Exchange and is a constituent of the Nikkei 225 (Japan 225) stock index.
Rockwell Automation (NYSE:ROK)
Market cap: $32 billion
Like ABB and FANUC, Rockwell Automation sells industrial robots – chiefly through its Allen-Bradley brand. It is also involved in software automation through its FactoryTalk and LifecycleIQ brands. The company covers a wide set of industrial customers, including chemicals, oil and gas and car manufacturers.
Rockwell is one of the oldest companies on this list, with origins dating back to 1903. It is a constituent of the S&P 500 (US SP 500) stock index.
A stellar earnings call saw ROK stock perform well at the end of 2022, helping to offset some of the losses seen earlier in the year. In July 2023 it was close to reaching its record high, but has consolidated in the months since.
Market cap: $14 billion
Teradyne manufactures and sells automatic test equipment (ATE) to its tech hardware customers, which include Qualcomm, Samsung, IBM and Texas Instruments. In 2015, it acquired the leading robot arm manufacturer Universal Robots. It also has mobile industrial robots and autoguide mobile robot divisions, to help with logistical challenges within industrial processes.
In its last earnings call, TER reported that revenue and income were both down YoY. The company is part of the S&P 500 (US SP 500).
Market cap: $72 million
Knightscope is a US-based company that sells security cameras and robots, including its line of Autonomous Data Robots (ADRs) used to monitor neighbourhoods, malls and more. The ADRs use self-driving technology and detection systems and can alert police of people carrying weapons, read licence plates and identify suspicious activity.
KSCP is a relative newcomer to the markets, and a rare company that chose to list in 2022 – a notably poor year for IPOs. Despite hitting a high of $15 on the day, its shares performed poorly since, and are now worth just $1.
Robotic investment funds
You don’t have to choose individual robotics stocks to take your position on the sector. Robotic investment ETFs track the prices of robotics indices, enabling you to invest in or trade multiple robotics companies at once.
Some of these funds focus solely on robotics, while others have a wider remit. The Global X Robotics & Artificial Intelligence ETF, for example, invests in companies in both the robotics and AI fields. Some of its key holdings include ABB, Intuitive Surgical and Nvidia.
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