Among Wall Street’s favorite tech shares, robotics stocks stand as an important segment. From self-driving cars to robotic arms in manufacturing, these innovative companies are reshaping our world. For investors seeking a slice of this dynamic sector, robotics stocks offer a compelling opportunity.
The robotics sector is experiencing significant growth, with an estimated value of $46 billion in 2024 and projected to reach $96 billion by 2029. Meanwhile, the Global X Robotics & Artificial Intelligence ETF (NASDAQ:BOTZ) has become a popular choice among investors. This exchange-traded fund (ETF) offers exposure to companies involved in robotics, artificial intelligence (AI) and automation technologies. BOTZ’s year-to-date (YTD) return of almost 8% reflects strong investor interest in the sector. Let’s explore three top robotics stocks with the potential for notable returns.
ABB (ABBNY)
Topping our list of robotics stocks is Switzerland-based ABB (OTCMKTS:ABBNY). The company operates in four main segments: electrification, robotics & discrete automation, motion, and process automation. Known for its innovative solutions like manufacturing robots, electric vehicle charging infrastructure and industrial motors, ABB continues to expand its market presence.
In the first quarter of 2024, ABB reported flat year-over-year (YOY) revenues of $7.87 billion, supported by strong contributions from its electrification segment. Despite a 5% YOY decline in order intake from the previous year’s peak, totaling $9 billion, the company raised its profitability guidance for the full year 2024. Meanwhile, EPS dropped 12.5% to 49 cents.
In May, ABB bolstered its electrification portfolio by acquiring Siemens‘ (OTCMKTS:SIEGY) wiring accessories business in China aimed at enhancing regional customer offerings within smart buildings. ABB also launched the next-generation robotics control platform OmniCore to accelerate advanced automation. Furthermore, management invested $35 million in a new U.K. factory to expand manufacturing capabilities in Europe.
Despite mixed earnings, ABBNY stock gained approximately 25% since January. The stock currently trades at 24.3 times forward earnings and 3.2 times sales. We believe investor enthusiasm for electrification and recovery in automation can support a bullish outlook in ABBNY stock. Therefore, interested readers can regard dips in ABB shares as an opportunity to hit the ‘buy’ button.
Cognex (CGNX)
Next on our list of robotics stocks is Cognex (NASDAQ:CGNX). The company offers machine vision products that help automate manufacturing and distribution tasks globally. Its product portfolio primarily includes vision software, vision sensors, vision systems and ID products.
For the first quarter of 2024, Cognex reported financials that reflected a challenging, yet stable business environment. Revenue increased 5% YOY to $211 million driven by growth in logistics and semiconductors. However, adjusted EPS dropped 14% YOY to 11 cents while operating expenses increased by 5% from the previous year’s quarter. Nonetheless, Cognex’s financial position showed resilience with $557 million in cash and investments and no debt.
In April, Cognex unveiled the In-Sight L38, an AI-powered 3D vision system. This innovative technology combines 2D and 3D vision with AI capabilities, addressing diverse inspection and measurement tasks in manufacturing automation. I believe the increasing use of AI, machine learning and IoT in industrial applications bodes well for Cognex. Their products are integral to these advanced systems, positioning them to capitalize on these technological trends.
CGNX stock has appreciated more than 11% YTD. Although shares are richly valued at 60 times forward earnings and 9.5 times trailing sales, analysts’ 12-month median forecast at $48.62 signals a 5% upside potential.
Zebra Technologies (ZBRA)
Rounding out our discussion of robotics stocks, Zebra Technologies (NASDAQ:ZBRA) focuses on automatic identification and data capture (AIDC) solutions for enterprises. The company’s core offerings include barcode printers and scanners, mobile computers and workflow optimization software. These tools enhance the efficiency of robotic systems in logistics and supply chain operations.
Investors noted that Zebra’s first quarter 2024 earnings highlighted ongoing demand weakness across end markets. The company reported sales of $1.18 billion, marking a 16.8% decline YOY. EPS at $2.84 was a 28% decrease from the previous year.
Despite headwinds, Zebra continues to strengthen its market position through strategic initiatives. It recently announced a collaboration with pharmacy retailer Walgreens Boots Alliance (NASDAQ:WBA), which is leveraging Zebra’s Workcloud Actionable Intelligence software to optimize operational efficiency across 8,000 stores. This implementation yielded substantial savings and improved inventory management.
In addition, Zebra is innovating with new generative AI capabilities developed in partnership with several tech heavyweights including Qualcomm (NASDAQ:QCOM). This collaboration aims to improve customer experiences and boost employee productivity.
So far in 2024, ZBRA stock is up nearly 13%. The shares are trading at 26.2 times forward earnings and 3.7 times sales. Wall Street maintains an optimistic outlook, setting a median 12-month price target of $348.25, a potential 13% upside from its current levels.
On the date of publication, Tezcan Gecgil 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.
