The remarkable advancements in automation, powered by robotics, have put several robotics stocks to buy on investors’ radar.
In recent years, the mushrooming power, utility and functionality of artificial intelligence have accelerated the use of robotics across several industries. From manufacturing to healthcare and e-commerce, robots are reimagining traditional processes whilst opening up a world of new possibilities. Simply put, robots have propelled mankind into a world where the unimaginable becomes a reality.
Several companies have adopted this narrative, piling billions of dollars into robotic investment and research. According to Precedence Research, the global robotics market size is expected to reach $283.19 billion by 2023. This is with a compound annual growth rate (CAGR) of 14.7% between 2023 and 2032.
However, despite the outlook, a few fundamentally strong names have seen their stocks trend lower amidst a competitive landscape. For investors, the dip in these stocks presents a prime opportunity to invest in these names for long-term gains.
Rockwell Automation (ROK)
Rockwell Automation (NYSE:ROK), the industrial automation juggernaut, remains one of the top robotics stocks to buy this year. The company not only provides the software to power industrial automation but also consulting services to ensure its seamless operation. Its products have served companies across a bevy of industries that leverage automation to streamline production and increase productivity.
Rockwell made a series of investments last year to widen the scope of its robot automation capabilities. In 2023, the company acquired ClearPath Robotics to help streamline end-to-end production logistics. This follows its purchase of India-based Knowledge Lens to integrate its AI-powered solutions into its offerings.
While the company holds a strong market position, its recent earnings were dimmer than expected. In the second quarter, Rockwell reported lower sales and profits as a result of excess inventory at customer locations. For the full year, it expects sales to decline between 6% to 8%. Nonetheless, the company remains firm in its commitment to expand its portfolio of industrial automation offerings for long-term growth.
ROK stock is down significantly this year- reaching a new 12-month low last month. However, the dip is a good buying opportunity for investors bullish on the role of robotics in transforming traditional processes.
Medtronic (MDT)
Robotics are poised to play a key role in shaping the future of medicine by enhancing medical procedures and patient care. One company pushing the boundaries in traditional medical procedures is Medtronic (NYSE:MDT). The healthcare company is a leader in medical innovation, covering four major segments: surgery, diabetes, neuroscience and cardiovascular health.
Medtronic’s segmented business allows for automation across various medical procedures. The company has invested millions in its automation innovations over the years. Some of its more notable projects include a Touch Surgery Live Stream that provides AI surgical insights and Hugo, its robot-assisted surgery system.
Coming to the financials, Medtronic reported only a 0.5% increase in FY24 revenue attributed to a cooling demand for its heart devices. Shares of the company fell 5.1% following earnings. However, with the guidance of 4% to 5% in revenue growth and shares down 3.3% for the month, this is a good time to buy MDT shares. The dip presents a great opportunity to invest in its long-term potential.
It’s also worth noting that Medtronic increased its dividend payout to $0.70 per share quarterly. This marks its 47th consecutive dividend increase, making this stock a strong pick for income-focused investors.
UiPath (PATH)
UiPath’s (NYSE:PATH) high-utility offerings have made it one of the top robotics stocks to buy on the market. Its tools help businesses build and manage software robots with a platform that can automate repetitive tasks.
According to Robocorp, 65% of management tasks can be automated using RPA. This positions UiPath, a leader in RPA solutions, for significant long-term growth as more businesses adopt automation to improve efficiency.
But while the company stands to disrupt the AI landscape, its shares are down significantly this year. The problems stem from two issues, higher inflation driving up wages and weak sales guidance. This culminated in the departure of its CEO after just three months at the helm. However, leadership changes aren’t always a bad thing and the recent shakeup could be just what the company needs.
Nevertheless, there are still plenty of reasons to remain optimistic about the stock’s future performance. For one, although full-year revenue guidance was lowered, revenue in the current quarter was up 16% from the prior year. This is reflective of UiPath’s strong RPA market position that will play in its favor as the generative AI boom unfolds. Second, several analysts remain bullish on PATH stock including Cathie Wood who picked up shares on the dip.
In short, UiPath is a great buying opportunity for investors looking to capitalize on robotic automation gains.
On the date of publication, Divya Premkumar 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.
On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.
