AI technology is expected to turbocharge growth in robotics as it moves beyond programmed tasks to an adaptive learning system. However, both technologies are still in their nascency, offering tremendous long-term upside potential in robotics stocks to buy.
Robotics companies are reshaping everything from manufacturing to healthcare by delivering precision and efficiency beyond human capabilities. Moreover, it’s still early in its multi-year growth story, as it’s expected to swell to $95.93 billion by 2029 and potentially reach over $286 billion by 2032. Though these forecasts may seem like much, the advancements in natural language processing and machine learning signal a thrilling growth trajectory ahead. With that backdrop, here are three high-potential robotics stocks representing the best way to play the burgeoning sector.
Intuitive Surgical (ISRG)
Intuitive Surgical (NASDAQ:ISRG) is a leader in robotic-assisted surgery and is renowned for its da Vinci systems. It has operated one of the most consistent businesses in the robotics space over the past several years, and its stock has followed suit. ISRG stock is up a spectacular 44% in the past three years, comfortably beating the S&P 500’s 26% gain.
Of late, we’ve seen the firm bounce back from a pandemic-induced slowdown, posting strong growth across both lines. It bested top and bottom-line estimates in four out of the past five quarters, with its net income growing by leaps and bounds. Its Q1 report revealed a net income jump to $547.4 million from $360.8 million on a year-over-year basis. Additionally, this stellar growth is accompanied by an 11% increase in revenue to $1.9 billion and a 16% rise in da Vinci procedures.
Expectations are building around the launch of the Da Vinci 5 robot next year. It boasts a computing power that is “10,000 times” that of its predecessor, setting the cash registers ringing at Intuitive.
Global X Robotics & Artificial Intelligence ETF (BOTZ)
It’s never easy to bet on an emerging industry, especially when it’s as complex as AI or robotics. These industries can have a laundry list of subcategories, from machine learning to humanoid robots, offering substantial long-term upside. Hence, for those looking to dilute individual stock investing risks and amplify exposure to sector-wide growth, you’d want to bet on Global X Robotics & Artificial Intelligence ETF (NASDAQ:BOTZ).
The BOTZ ETF encompasses a highly diversified portfolio that includes 48 robotics and AI stocks. Its relatively low expense ratio of 0.69% makes it a remarkably appealing bet for cost-conscious investors.
Moreover, over the years, it has been a rewarding choice, boasting an impressive 67% return, outperforming the sector median by 54%. Additionally, in the past six months, it achieved a healthy 17% gain, outstripping other ETFs by 62%. With the industry continuing to push forward and the headwinds subsiding, the BOTZ ETF is poised for further attractive gains.
Teradyne (TER)
Teradyne (NASDAQ:TER) operates primarily as a semiconductor testing product provider and has a sizeable presence in robotics. Over the past few years, we’ve seen Teradyne make significant strides in robotics and AI, translating into strong gains for its stock. TER stock shot up more than 41% last year, beating the S&P 500 by a sizeable margin.
A key development for its robotics division is its recent partnership with AI bellwether Nvidia (NASDAQ:NVDA). The collaboration aims to integrate AI into Teradyne’s automation processes. However, the robotics division is still in the early stages of determining what it can contribute to its overall portfolio. In its Q1 report, Teradyne’s robotics ventures contributed $88 million to its $600 million in total sales, representing roughly 15%. That’s more or less the same contribution to the company’s Q1 2023 revenues. Nevertheless, it’s still in an emerging segment for its business, which will have a major role in shaping the future of automation as we know it.
On the date of publication, Muslim Farooque 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.