Spatial computing stocks have been in the limelight in recent weeks. These companies are at the forefront of disruptive innovations that converge the physical world with the digital world. In turn, spatial computing stocks have been on the mind of investors.
The technology can be described as “the digitization of activities of machines, people, objects, and the environments in which they take place to enable and optimize actions and interactions.” In other words, spatial computing uses the three-dimensional (3D) space around an object so that it can interact with the rest of the world regardless of its location. It incorporates numerous technologies, including global positioning systems (GPS), artificial intelligence (AI), machine learning (ML) and the Internet of things (IoT).
The growing need to enhance human-machine and machine-to-machine interaction continues to fuel rapid advances in the spatial computing market. In fact, analysts indicate that investing in a small spatial computing stocks now could represent as significant an opportunity as buying an Apple (NASDAQ:AAPL) stock in its early days.
Moreover, spatial computing offers applications in almost all aspects of life, including gaming, shopping, transportation, engineering and agriculture. Zion Market Research’s report indicates that “The global Spatial Computing Market, which was estimated at 22.22 (USD Billion) in 2019 and is anticipated to accrue earnings worth 196.21 (USD Billion) by 2026, is set to record a CAGR of nearly 41% over 2020-2026.”
With that said, here are three spatial computing stocks that should constitute great additions to any portfolio in 2022 and beyond.
Now, let’s dive in and take a closer look at each one.
Spatial Computing Stocks to Buy: Deere (DE)
52-Week Range: $261.54 – $400.34
Dividend Yield: 1.22%
Moline, Illinois-based Deere is a leading manufacturer of heavy agricultural equipment worldwide. It has been hailed as one of the most prominent names in the fourth industrial revolution, “a fusion of advances in artificial intelligence (AI), robotics, the Internet of Things (IoT), genetic engineering, quantum computing, and more.”
In fact, Deere uses machine learning, AI and computer vision applications to boost yields, reduce costs and enhance overall sustainability in agriculture. For example, the company recently announced an allied distribution agreement with Smart Guided Systems to sell its Smart-Apply Intelligent Spray Control System. In turn, tractors use it in high-value crop applications.
This system relies on LiDAR, “which stands for Light Detection and Ranging, is a remote sensing method that uses light in the form of a pulsed laser to measure ranges (variable distances) to the Earth.” The technology offered by Deere helps farmers decrease the number of chemicals they use on crops.
Furthermore, Deere announced fourth-quarter results in late November that beat estimates. Revenue increased 16% year-over-year (YOY) to $11.33 billion. Net income came in at $1.28 billion or $4.12 per diluted share, up 70% YOY from $757 million, or $2.39 per diluted share, in the prior-year quarter. Cash and equivalents ended the period at $8.13 billion.
“Our results reflect strong endmarket demand and our ability to continue serving customers while managing supply-chain issues and conducting contract negotiations with our largest union,” CEO John May said.
For most manufacturers, inflation and supply-chain bottlenecks have been roadblocks in 2021 — and Deere is no exception. However, management anticipates demand for farm and construction equipment to continue benefiting from economic growth and infrastructure investments.
DE stock currently sells for roughly $348 and has soared 29% so far in 2021. Shares are currently trading at 2.6 times trailing sales, and the 12-month median price forecast for Deere stock stands at $415.
52-Week Range: $10.45 – $37.60
Sunnyvale, California-based Matterport is a spatial data company focused on digitizing and indexing physical spaces such as real estate, factories or travel and leisure locations. On its 3D data platform, individuals can turn physical spaces into accurate as well as immersive digital twins.
Matterport announced Q3 results in early November. Total revenue increased 10% YOY to $27.7 million. The company generated non-GAAP net loss of $14 million, or 6 cents loss per share, compared with non-GAAP net income of $1.5 million in the previous year. Cash and equivalents ended the period at just under $149 million.
If you have recently looked at real estate listings online, you might have noticed digital twins of homes made on Matterport. Millions of users have also downloaded its free app, Matterport for Mobile.
In Q3, over 6 million digital twins were uploaded to the platform. And the number of subscribers went up by 116% YOY. Regular InvestorPlace.com readers are likely to remember that Matterport has strategic partnerships with Meta Platforms (NASDAQ:FB) and Amazon (NASDAQ:AMZN).
MTTR stock is currently at $22.30 per share, up over 50% over the past six months. Additionally, shares are trading at 66 times trailing sales, and the 12-month median price forecast for Matterport stock is $28. Thus, interested investors should consider buying the dips.
Spatial Computing Stocks to Buy: Tesla (TSLA)
52-Week Range: $539.49 – $1,243.49
Palo Alto, California-based Tesla has become a global leader in electric vehicles (EVs). It is also en route to launching a fully autonomous driving service in the coming years.
The self-proclaimed spatial computing evangelist Robert Scoble suggests Tesla “is the only automaker to have a neural network–based system on the road.” He also believes Tesla could disrupt or even replace Apple Maps and Alphabet’s (NASDAQ:GOOG), (NASDAQ:GOOGL) Google Maps within the next two years as Tesla robotaxi will be available widely.
Moreover, Tesla released Q3 results in late October. Total revenue increased 57% YOY to $13.76 billion. Non-GAAP net income went up by 139% YOY to $2.09 billion, or $1.86 per non-GAAP diluted share, up from $874 million, or 76 cents per non-GAAP diluted share, a year ago. Also, the company generated free cash flow of $1.3 billion, and cash and equivalents ended the period at $16.1 billion.
On the results, the firm cited that the “third quarter of 2021 was a record quarter in many respects. We achieved our best-ever net income, operating profit and gross profit.”
As of now, TSLA stock hovers around $930, up 32% year-to-date (YTD). Additionally, shares are trading at 24.7 times trailing sales, and the 12-month median price forecast for TSLA stock sits at $924.50. Nonetheless, potential investors could consider buying around $900 or even below.
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.
Tezcan Gecgil, Ph.D., has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all three levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation.