Despite the carnage caused by the novel coronavirus, the one investment sector that has outperformed so many others is technology. And within this broad segment, robotics stocks represent a viable, long-term pathway for success. Previously relegated to gimmicky inventions, the advent of revolutionary developments in machine learning and automated manufacturing infrastructure has given this market substantial insulation in this crisis.
Back in 2017, Boston Consulting Group noted that the robotics industry was growing faster than expected. Due to increased demand for commercial and consumer automated applications, BCG upwardly revised its 2025 market revenue forecast to $87 billion. And that could be on the conservative end. Tractica projected that the industry driving robotics stock will hit $237 billion by 2022.
Of course, the novel coronavirus has disrupted the immediate trajectory. But against a longer timeframe, the pandemic could turn out to be a net positive for robotics stock. Primarily, robots and automated solutions don’t get sick. Therefore, while we humans are sheltering in place for the next health-related crisis, robots can do their job with minimal supervision.
A second factor supporting robotics stock is the economic necessity of a tech-enhanced workforce. As you know, this present crisis brought to the forefront glaring social inequities. One of the most popular solutions is to raise the minimum wage. But that requires companies to comply.
Will they? Of course not. Instead, they will placate the masses with empty promises while coldly replacing their labor force with automated systems. Unfortunately, there are no easy answers to solve broader inequalities. The best course of action is to consider these eight robotics stocks to buy:
- Rockwell Automation (NYSE:ROK)
- Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL)
- Amazon (NASDAQ:AMZN)
- Toyota (NYSE:TM)
- Teradyne (NASDAQ:TER)
- FLIR Systems (NASDAQ:FLIR)
- Cyberdyne (OTCMKTS:CYBQY)
- Kraken Robotics (OTCMKTS:KRKNF)
Finally, the autonomous machinery has strong foreign policy implications. China has made it no secret that it wants to dominate the world economy through initiatives like “Made in China 2025.” Naturally, the U.S. will have something to say about that. This competitiveness only improves the case for these robotics stocks to buy.
Robotics Stocks: Rockwell Automation (ROK)
One of the leaders of industrial automation and information technology, Rockwell Automation has been enjoying significant demand in the markets since its March lows. However, ROK stock before the pandemic wasn’t looking too hot. After hitting a pre-pandemic peak in January 2018, Rockwell shares declined due to slowing manufacturing demand and an accelerating U.S.-China trade war.
Granted, some of these headwinds have yet to fade. In particular, prospective buyers of ROK stock should keep a close watch on fraying relations with China. However, if you’re willing to wait out some potential turbulence, ROK is one of the most compelling robotics stocks to buy.
Mainly, Rockwell offers significant contributions in the burgeoning industrial internet of things (IIOT) with its innovations in sensors, controls and system architecture. With these mechanisms, Rockwell can have machines “talking” to each other, alerting human managers to critical information, such as when certain machinery require maintenance.
ROK may not be the most exciting name. However, with demand bolstering robotics stocks, you’ll want exposure to a proven leader.
Alphabet (GOOG, GOOGL)
Usually, most investors associate Alphabet with the internet, not with robotics stocks. In fact, Alphabet attempted many ventures in the past with automated machinery to no avail. Therefore, news that the company was reengaging its robotics division probably didn’t sway prospective buyers of GOOG stock.
If you were going to buy shares, you probably would have done so irrespective of the company’s automated machinery.
However, this time, Alphabet’s take has a robust mixture of innovation and practicality. Now, the focus is on mechanical hands grasping objects and navigating new environments. Theoretically, this development has significant implications for consumer retail as menial tasks performed by human workers can be completely automated.
Granted, the robotics component of Alphabet has never been much of a selling point for GOOG stock. But while you’re waiting, the company offers myriad businesses that are relevant now.
Robotics Stocks: Amazon (AMZN)
If you head on over to Amazon’s robotics division’s website, you’re treated to a vision of the future where we work seamlessly within its automated infrastructure. Does the e-commerce giant take us for idiots? Apparently, the answer is a hearty yes. Perhaps no one within the organization realizes that those machines will eventually replace most of its labor force.
Those “lucky” enough to still be employed could find themselves working for the machines, not the other way around. When it comes to the less-favorable side of robotics stocks, Amazon is one of the worst offenders.
But you know what? This has nothing to do with the investment narrative of AMZN stock. Despite its extreme momentum, this is one of those names that you can confidently buy into rising strength.
I’m sure it drives more than a few people nuts that the ultra-rich continue to get richer during this crisis. But the albatross that is Amazon is simply unstoppable. Eventually, consumer retail will be divided into two segments: Amazon.com and big-box retailers. At least with ownership of AMZN stock, you can benefit from this ghastly situation.
When you hear the name Toyota, you’re immediately thinking about cars, not about robotics stocks. However, the automaker doesn’t get enough credit for its holistic approach to industrial technology and manufacturing efficiencies. Recently, one of its most exciting innovations is its humanoid robot.
Unlike other automated solutions, Toyota’s invention significantly mimics the human form. And that’s by design, as it enables the robot to perform functions that previously could only be managed by a human. Further, Toyota’s humanoid acts as a force-multiplier, exerting force to help manage heavy or cumbersome objects. Over time, these robots could substantially boost manufacturing capacities, likewise lifting TM stock.
Of course, the automaker’s robotics solutions may not immediately transform the company. However, while you’re waiting for this narrative to play out, you can buy TM stock for its underlying automotive business. Plus, it pays a nice dividend of 3%.
Robotics Stocks: Teradyne (TER)
As the underlying innovations of robotics stocks become ever more advanced, it is only natural for worker bees to think in dystopian terms. No, I’m not suggesting that machines become self-aware, thereby becoming truly autonomous. Instead of an apocalyptic bloodbath, human operators worry about losing their jobs.
Fortunately, Teradyne has a much more politically and perhaps economically palatable solution. Rather than researching true autonomy, Teradyne focuses on collaborative robots. What this entails is that the machines take over the jobs that no one wants; work that requires extremely monotonous functions or are outright dangerous.
Instead, operators can perform duties that are minute in detail, enhancing overall productivity. As well, it’s not clear if investments toward human-replaceable platforms are financially sound. With Teradyne’s collaborative innovations, we have a win-win situation, supporting the narrative for TER stock.
Finally, Teradyne’s automated architecture can improve overall health outcomes for its client companies. Again, this is another win-win, making TER stock an intriguing idea.
FLIR Systems (FLIR)
During my coronavirus-fueled downtime, I’ve had a chance to catch up on some reading. For real-life mystery lovers, I highly recommend David Paulides’ Missing 411 series, which dives into the unusual circumstances by which people disappear in our national parks. Among the high-profile missing persons cases discussed in the series is Stacey Arras, a teenager who simply vanished in Yosemite National Park in 1981.
Arras has never been found, which raises the eerie question: Why do so many people disappear in popular, well-trekked national parks?
Another question you might be wondering: What does this have to do with robotics stocks? First, it’s to be fair to the automation industry. While some of the innovations may take our jobs, companies like FLIR Systems develop vital technologies such as thermal imaging cameras which feature civilian and military applications. Thus, you can feel good about supporting FLIR stock.
Second, FLIR develops advanced robotic platforms for military and law enforcement use. By sending robots first into hot zones, our men and women in uniform can safely gather intelligence. In addition, FLIR’s robots can help diffuse volatile situations. The company’s life-saving solutions are yet another reason to consider FLIR stock.
Robotics Stocks: Cyberdyne (CYBQY)
Though Cyberdyne shares the same name as the network responsible for the near destruction of humanity in the Terminator franchise, the real version shares nothing with the fictional one. In fact, CYBQY stock trades on the integration of machinery and artificial intelligence to support people with physical challenges. So, chalk this one up as another feel-good investment among robotics stocks.
Primarily, Cyberdyne’s claim to fame is its Hybrid Assisted Limb platform, or HAL for short. With this device, Cyberdyne can help patients recovering from injuries or medical conditions get back to normal quicker. For those that understand Japanese, the company has a YouTube video featuring many of the advantages of the HAL system.
In my opinion, one of the most groundbreaking innovations is that HAL not only provides physical assistance to wearers, it alerts the patient whether their body movements are performed correctly. By encouraging correct movements and posture through hard data, HAL can accelerate a patient’s recovery process.
Of course, the major knock against CYBQY stock is that as an over-the-counter security, it’s volatile. However, this relatively unknown company could be a surprise winner in the post-pandemic era.
Kraken Robotics (KRKNF)
With Kraken Robotics, I’ve saved the riskiest name among the robotics stocks on this list for last. Like Cyberdyne, KRKNF stock trades in the OTC market. Unlike Cyberdyne, shares are trading for less than 50 cents at time of writing. So, why mention what initially sounds like a ridiculously speculative affair?
Again, I want to emphasize — Kraken is speculative. With KRKNF stock, you want to assume from the get-go that this is a lottery ticket. That said, it’s quite an intriguing one. At its core, Kraken is a marine technology firm that develops advanced sensors for unmanned underwater vehicles. Obviously, this has strong implications for civilian research. But I’m more interested in the tech’s military applications.
Last year, Kraken secured a contract to provide sensors for the U.S. Navy’s man-portable Autonomous Underwater Vehicle (AUV) program. At the time, the news briefly bolstered Kraken shares before tumbling lower.
But that was then. Today, our rivalry with China has become inflamed with tension. Undoubtedly, the need to control contested waterways will be the U.S. Navy’s priority. So, watch this space carefully.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.