Automation advancements have been incredible, putting the spotlight on the robotics sector as a whole. Indeed, the rise of artificial intelligence has boosted robotics use in manufacturing, healthcare, and e-commerce. This combination has the potential to revolutionize business processes and create vast new possibilities. Many companies invest billions in robotics, and one good example is Tesla (NASDAQ:TSLA).
In a recent event, Elon Musk emphasized the untapped economic potential of humanoid robots. He also said focusing on these can boost Tesla’s market cap to $25 trillion. That said, investors might also want to set their eyes on specific pure-play robotic stocks and see how these opportunities amount to much more than “just” robots.
The robotics sector has reached $283.19 billion in market value in 2023. Despite this, some strong robotics stocks have dipped due to competition, offering investors long-term gain opportunities. Below are compelling robotics stocks to consider.
Intuitive Surgical (ISRG)
As the leader in robot-assisted surgeries, Intuitive Surgical (NASDAQ:ISRG) has a $156.88 billion market cap and has seen over 16.1% growth since 2019. The company is known for its da Vinci surgical system, which minimizes surgical trauma in patients. This has solidified the presence and potential of robotics in the medical sector, making the ISRG stock a must-have in every investor portfolio.
In my view, surgeries are only likely to involve more robotics in the coming years. The reality is that a robotic arm is going to be much, much more accurate than any human in getting at the problem areas and fixing what needs fixing with minimal excess damage. Using Intuitive Surgical’s robotic assistance, surgeries become less of a game of Operation and more of a precision task.
Surging 31% year-to-date, ISRG stock has truly been an excellent bet. That said, I think this growth can continue. The company expects to grow revenue by 11% this year and anticipates $469 million in GAAP operating income in Q1 2024.
Medtronic (MDT)
Another leader in the medical and robotic space, Medtronic (NYSE:MDT) is among the more undervalued names I’m looking at right now. Approximately 80% of the company’s revenues are recurring, which means this is a stock that’s less sensitive to macroeconomic hurdles. Importantly, Medtronic offers strong capital appreciation upside as well as income potential but only trades at around 14 times forward earnings. With more than 48 years of consecutive dividend payouts, this is about as stable a total return play in the healthcare space as they come.
Recently, the company inaugurated its first large-scale Global IT Center in Hyderabad, investing $60 million to create over 300 jobs in the next five years. The center will focus on building advanced tech like Cloud Engineering and Digital Health. Analysts have praised Medtronic’s continued investments, noting that the market supports its innovative ecosystems.
Rockwell Automation (ROK)
The successor to Rockwell Internation, Rockwell Automation (NYSE:ROK) now operates in software and control, smart devices, and lifecycle services. The company has a $33 billion market cap despite facing a revenue decline of 6.57% in the quarter ending March 31, 2024.
Notably, Rockwell focuses on hardware and software services to enhance different manufacturing processes. Analysts remain cautious as shares of ROK stock declined 10% in 2024. However, the company provides consistent revenue streams and cash flows, reassuring investors. The stock currently trades 26 times trailing earnings and 3.4 times forward sales. However, analysts project the company’s EPS could rise 18.33% to $12.01 by 2025, making it a robotics stock worth considering.
On the date of publication, Chris MacDonald did not hold (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.
