Investors looking to invest in the next best industry have probably considered artificial intelligence (AI) or quantum computing. However, these favorite robotics stocks have already transformed various industries, particularly manufacturing and healthcare, by creating new opportunities for automation and efficiency.
With the advent on sophisticated AI models, the sector could very well be on its way to entering a hyper-growth stage as technological advances continue to make these technologies not only possible, but efficient. Wall Street, of course, has its own favorites for this burgeoning sector. Below are just three of them with immense wealth-earning potential.
Intuitive Surgical
Intuitive Surgical (NASDAQ:ISRG) has been instrumental in transforming the way in which surgeons operate complicated surgical procedures. This robotics firm is the pioneer and market leader in robotic-assisted surgery. The company’s flagship product, the da Vinci Surgical System, enables surgeons to perform minimally invasive procedures with enhanced precision, control and dexterity. The system has been used in over 14.2 million surgeries across various specialties such as urology, gynecology, general surgery and cardiothoracic surgery. In its Q4 earnings report, Intuitive Surgical announced procedures had increased by 22% from last year with 2.3 million procedures performed in 2023.
The robotics company’s revenue model also embeds a lucrative recurring element tied to the services and operational leases related to the da Vinci product. In 2023, recurring revenue represented 83% of total revenue compared with 79% in 2022.
Wall Street, overall, is upbeat about Intuitive Surgical, with the majority of analysts covering the stocks issuing a “Buy” or “Strong Buy” rating for the robotics firm’s stock. ISRG shares have appreciated nearly 16% on a year-to-date perspective.
Teradyne (TER)
Teradyne (NASDAQ:TER) is a leading provider of automated test equipment for semiconductors, electronics, wireless devices and industrial automation. The company’s products help ensure the quality and performance of various devices and systems that power the modern world. Teradyne’s robotics segments consist of Universal Robots, a leading supplier of collaborative robotic arms, and Mobile Industrial Robots, a leading maker of autonomous robots for industrial purposes.
Because Teradyne is both a supplier of robotics parts and a provider of autonomous robots, the company’s revenue streams are quite diversified. A strong position in the fast-growing semiconductor testing market also helps to offset any potential slack in the robotics segment. Unfortunately, the company’s revenue growth has been bogged down by a slower than usual semiconductor market that’s still recovering from a glut of chips. Revenue declined 15% from 2022 to 2023.
However, the bright spot for the business its robotics business segments. Revenue from robotics increased by 50% in Q4 to $129 million. This segment is connected with the company’s industrial automation ambitions and will definitely be an engine for future growth.
Zebra Technologies (ZBRA)
Zebra Technologies (NASDAQ:ZBRA) is a leading provider of enterprise asset intelligence solutions, such as barcode scanners, printers, RFID tags, mobile computers and software. The company’s products ultimately help businesses track and manage their assets, data and workflows across various industries, such as retail, healthcare, transportation and manufacturing. The company also offers robotics solutions through Fetch Robotics, which provides robots for warehouse automation.
Unfortunately, the company’s financial figures have struggled in recent quarters due to soft demand from its end markets. The company’s most recent Q3 2023 earnings report underscored that point. Revenue decreased by 31% due to “elongated sales cycles” and “end-market softness.” The company’s Q4 earnings report suffered similarly.
The macroeconomic environment probably shares most of the blame for this. Still, because the Federal Reserve has reiterated that there will be 3 interest rate cuts in 2024, there could be hope for Zebra’s stock, which is down about 1% over the past twelve months and trading at a relatively cheap multiple.
On the date of publication, Tyrik Torres did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
