Robots play an increasingly large role in our lives, whether we realize it or not. Today, robots are used in everything from manufacturing our household appliances to navigating the cars we drive, performing surgery on us, and delivering packages to our homes. The worldwide robotics sector is now worth $25 billion in annual revenues, and that figure is forecast to grow to $152.9 billion by 2033, according to data from Future Market Insights. The estimated growth trajectory could be even more dramatic as artificial intelligence (AI) gets increasingly integrated into robots, making them smarter, more productive, and more innovative than anyone could have imagined only a few years ago. As the robot revolution gathers steam, we look at the seven best robotics stocks in July.
Robotics Stocks: UiPath (PATH)
UiPath (NYSE:PATH) has only been publicly traded for two years. Unfortunately, the company that specializes in making robotic process automation software went public during the height of the pandemic trade in the spring of 2021. Since its market debut, PATH stock has gotten crushed, declining a total of 76%. However, things are looking up for the company this year, with its share price having rebounded 44% since January as investor sentiment toward tech securities improves.
UiPath’s software helps to automate repetitive office tasks, including those that employ business software such as customer relationship management or enterprise resource planning. The company recently announced that co-founder Daniel Dines will step down from his role as co-CEO on January 31, 2024. UiPath’s other co-CEO, Rob Enslin, will become the sole CEO, while Dines plans to become chief innovation officer. PATH stock could rise further along with the entire tech sector.
Amazon (AMZN)
Although its core business remains e-commerce sales, Amazon (NASDAQ:AMZN) is increasingly focused on robots, whether to locate and pack items at its warehouses or to sell to consumers for use in their homes. From digital personal assistants to aerial drones that fly packages to businesses and houses, Amazon has growing ambitions in the robotics space. To that end, the company has bid $1.7 billion to acquire iRobot (NASDAQ:IRBT), which makes the popular robotic vacuum cleaner Roomba. That deal is currently undergoing regulatory approvals.
Amazon sees robots as a key means by which it can drive future productivity growth and global sales. The adoption of robots is likely to intensify as artificial intelligence is integrated into more machines, making them even more productive and in demand among consumers. For investors, the push into robotics is yet another reason to take a position in AMZN stock. Year-to-date, Amazon’s share price has gained 50%. However, the stock is still 12% below its 52-week high, presenting a nice entry point.
Teradyne (TER)
Teradyne (NASDAQ:TER) is one of the world’s biggest robotics companies. Founded in 1960 by two MIT graduates, Teradyne today is one of the largest manufacturers of industrial robots in the world, with nearly 6,000 employees and annual revenues of close to $4 billion. While the company also tests electronic products such as laptop computers, it is the manufacture of industrial robots that drives its sales and growth.
Teradyne specializes in what are known as “collaborative robots,” or “cobots.” These are robots that work alongside humans in industrial manufacturing and on assembly lines, helping to make everything from cars to refrigerators. TER stock struggled during the 2022 downturn in technology securities but has recovered this year. Since January, Teradyne’s share price has increased 27%, bringing its five-year gain to 175%. TER stock also pays a quarterly dividend of 11 cents a share, which is good for a yield of 0.40%.
ABB Ltd. (ABB)
Swiss multinational ABB Ltd. (NYSE:ABB) has been a going concern since the late 1800s. The modern version of the company was formed in 1988 and is today focused on robotics and automation technology. Specifically, the company makes YuMi, an industrial robot that works alongside humans in industrial factories and on assembly lines. YuMi has two large arms that enable it to quickly and efficiently perform tasks in an industrial setting.
ABB is also involved in the development of electric vehicle battery chargers. The company’s Terra High Power charger is the “world’s fastest electric car charger,” according to ABB. Theoretically, it can charge any electric vehicle in 15 minutes or less. ABB stock has held up better than many of its peers. Over the last 12 months, the share price has increased 33%. Over five years, the stock has gained 62%.
Robotics Stocks: Intuitive Surgical (ISRG)
Medical device company Intuitive Surgical (NASDAQ:ISRG) has been on a tear lately, having risen 68% in the last 12 months, including a 32% increase during the past six months. ISRG stock is now trading near its 52-week high. The company is riding high on strong sales of its da Vinci surgical system. The Covid-19 pandemic created a surgical backlog that is now unwinding, driving sales for the company skywards. Over the past five years, ISRG stock has nearly doubled (up 94%).
Sales are particularly strong for the surgical instruments and accessories that are used with the da Vinci system. Da Vinci uses robotics to carry out minimally invasive surgical procedures on the heart and to remove all or part of the prostate gland. A growing number of surgeons are relying on the technology. The company today has an installed base of nearly 8,000 platforms worldwide and counting. Analysts at Citigroup (NYSE:C) recently maintained their “buy” rating on ISRG stock and lifted their price target on the shares to $400 from $317 previously.
Lockheed Martin (LMT)
Defense contractor Lockheed Martin (NYSE:LMT) is not among the “pure” robotics stocks, but it is a major contributor to the technology. Robots are increasingly becoming the norm in military and combat operations around the world. Robots today can perform dangerous tasks ranging from reconnaissance missions behind enemy lines to dismantling explosives and flying unmanned aerial vehicles (UAVs). These robots are fast becoming the norm in international warfare.
Lockheed Martin is a leader in creating military robots. The company has even developed a robotic mule, at a cost of $500,000 each, that carries soldiers’ equipment for them while on missions, taking heavy gear off the backs of soldiers. The use of robots by the U.S. military has grown so much that robotic dogs are now being used to patrol a select number of military bases across the U.S. Lockheed Martin is now testing robots in outer space.
LMT stock is up 13% over the last year and has gained 47% in the past five years.
Robotics Stocks: Global X Robotics and Artificial Intelligence ETF (BOTZ)
Lastly, we have an exchange-traded fund (ETF) that covers the entire robotics and artificial intelligence sector. The Global X Robotics and Artificial Intelligence ETF (NASDAQ:BOTZ) is one of several exchange-traded funds that is focused on the growth of robotics. The fund currently has assets of nearly $1.50 billion, and its main holdings include many of the companies mentioned in this gallery, including ABB, Intuitive Surgical, and UiPath.
The BOTZ exchange-traded fund’s expense ratio is mid-range at 0.68%, and it pays a semi-annual dividend of 5 cents a share for a yield of 0.19%. The BOTZ ETF is up 4o% year-to-date and has grown 97% since its inception in 2016. Most of its holdings consist of established robotics and AI companies. There are very few start-ups or speculative holdings in the fund. The diversity of holdings in the fund also helps to lower the potential risks that can come with owning the stock of a single company.
On the date of publication, Joel Baglole held a long position in C. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
