3 Robotics Stocks Poised for a Possible Industrial Revolution

Now could be a great time for investors to consider picking up shares of these robo stocks. I believe that although in the short term these technologies will be a slow burn in terms of improving company productivity, the AI ​​technology stack (you), machine learning and the Internet of Things (IoT) will all contribute significantly to the company’s revenue over the next decade.

Industry forecasts anticipate the market to reach a whopping $34.64 billion by 2031. However, overall, it’s not all good news for companies in this space. High upfront costs deter many potential adopters, investors should keep this in mind as capital spending on AI comes in at less than $1 trillion. In addition, lack of experience with advanced automation poses integration difficulties, meaning there are significant execution risks for companies experimenting with scaling robotics technologies.

However, I believe that the upside of these stocks is not yet fully appreciated or reflected in their share prices, thus giving investors many opportunities to participate in a potential bull run.

Here are three companies investors should consider.

Intuitive Surgery (ISRG)

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Intuitive surgical (NASDAQ:ISRG) is one of my favorite robotics stocks for investors to consider. It has a formidable market presence in the robotic surgery segment. Unlike some of the newer entrants, its machines can be seen mostly in hospitals, while others specialize in ambulatory surgery centers (ASCs). This gives the company a built-in competitive advantage and a moat because switching costs are very high for changing between different machines. I believe this advantage is sustainable in the long term due to being one of the first companies to commercialize robotics for use in surgery.

ISRG’s recent financials also suggest it could be a strong stock for investors to consider. The firm reported Q2 adjusted EPS of $1.78, up 25% year-over-year, beating its estimate of $1.54. It also had revenue of $2.01 billion, up 14%, beating the forecast of $1.97 billion. The future looks encouraging as it continues to roll out new installations despite its solid customer base.

Rockwell Automation (ROK)

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Rockwell Automation (NYSE:ROK) is a global leader in industrial automation. It is one of the few companies that has strong momentum behind it, while others like ISRG are expected to grow more slowly.

However, ROK’s smaller presence in the market means that its earnings and revenues fluctuate more than other firms. For example, last quarter it reported that organic sales were down 8.4% year over year and adjusted EPS was $2.71, down 10%.

However, I am still optimistic about the ROK’s future prospects. As we all know, we are going through some cyclical swings right now with lower consumer demand and confidence. As a business that depends heavily on the business cycle, ROK could be near or at the bottom of its recession. When economic conditions improve, I think there is a good chance that it will rebound optimistically, as the stock has lost 17.42% of its value year to date. Investors could then snap up one of these robo stocks at a bargain.

UiPath (PATH)

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UiPath (NYSE:PATH) contrasts sharply with Korea Republic stocks, as they have posted some impressive financials recently. Revenue was $335 million, up 16% year over year. Meanwhile, the annual recurring income (ARR) reached $1.508 billion, up 21% year-on-year.

The company’s outlook also looks solid, according to UiPath CFO Ashim Gupta. “While our revenue and operating margin guidance is impacted by the timing and length of the contract, we are confident in our ability to generate sustainable ARR growth at scale and significant non-GAAP adjusted free cash flow.”

A focus on ARR growth is key to PATH’s future profitability. It enables companies to sustainably expand their revenue and earnings by providing clear visibility into the company’s future revenue and earnings.

PATH has expanded its partnership with Microsoft (NASDAQ:MSFT) during the quarter by integrating with Copilot for Microsoft 365. It also unveiled a new family of large language models (LLM) at AI Summit. These are all great tailwinds that I believe will benefit the company tremendously going forward.

At the time of publication, Matthew Farley did not hold (either directly or indirectly) any position in the securities mentioned in this article. The opinions expressed are those of the writer, subject to reservation InvestorPlace.com Publishing Guide.

At the time of publication, the responsible editor had (neither directly nor
indirectly) any positions in the securities mentioned in this article.