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Wednesday, November 29, 2023

How to Invest in Robotics

The robotics industry is one of the largest markets in the technology space today, with applications across diverse sectors. This diversity may leave market watchers wondering how to invest in robotics. 

In simple terms, robotics is defined as the “science and technology behind the design, manufacturing and application of robots.” Robots themselves are described as devices that can perform tasks the same way people do, but without the assistance of human interaction. Unsurprisingly, some have predicted that a “robot revolution” will completely change the global economy over the next 20 years or so.

With the rise of robotics all but guaranteed, the Investing News Network has put together a brief overview of the sector, including how to invest in robotics for beginners.

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How to invest in robotics: Global robotics market overview

According to Allied Market Research, the global robotics market is expected to grow at a compound annual growth rate (CAGR) of 13.5 percent between 2020 and 2027 to reach US$189.36 billion.

This growth will be tied to the adoption of artificial intelligence (AI) and robotics technology across industries including defense and security, manufacturing, electronics, automotive and healthcare.

Research firm Markets and Markets projects that the industrial segment of the robotics market alone will grow at a CAGR of 12.3 percent from 2021 to 2026 to reach a value of US$75.3 billion. The firm predicts that the robotics market will play a key role in the coming age of automation, with smart factories already increasing demand for robots. Robotics and AI technologies are making their way into consumer goods manufacturing, food processing and packaging and ecommerce supply chain automation.

Demand for industrial robots is also rising in the medical field, including surgical robotics. A report by Verified Market Research projects that this segment of the robotics market will experience a CAGR of 17.6 percent from 2021 to 2028 to reach US$22.7 billion.

The automotive industry is the sector in which industrial robotics are playing the most transformative role. For example, auto manufacturer BMW (ETR:BMW) signed a supply agreement with robotics firm KUKA (OTC Pink:KUKAF,ETR:KU2) in Q2 2020 for 5,000 robots to help manufacture BMW’s current and future vehicle models. In Q3 2021, Nissan (OTC Pink:NSANY,TSE:7201) announced its Intelligent Factory initiative, which will incorporate the benefits of AI, internet of things and robotics technologies into vehicle manufacturing in an effort to create a zero-emission production system.

Based on these reports, it seems as though the robotics sector is going to grow significantly as it takes its place in a variety of sectors requiring automation.

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How to invest in robotics: Robotics stocks

For investors looking to enter this sector, robotics stocks may be a good place to start. Stocks are generally the more popular route to take when it comes to investment opportunities, and there’s certainly no shortage of robotics stocks to choose from. Major companies in the robotics sector include:

  • Cognex (NASDAQ:CGNX): Cognex provides machine-vision products that obtain and analyze visual information in order to automate robotic tasks where vision is needed. Cognex also offers machine-vision technologies that are used to automate the manufacturing and tracking of items such as mobile phones, medications and automobile tires.
  • iRobot (NASDAQ:IRBT): As its name suggests, iRobot is a consumer robot company that designs and builds robots. Its portfolio includes concepts in mapping, navigation, mobility and AI. It is also famously known for creating the Roomba, a floor-vacuuming robot.
  • ABB (NYSE:ABB): ABB is a leading power and automation technology company with a robotics and discrete automation division that offers machine and factory automation solutions, as well as a suite of wide-ranging robotics solutions and applications. The company’s new robotics manufacturing and research facility in China is expected to open in late 2021.
  • Rewalk Robotics (NASDAQ:RWLK): Rewalk Robotics is a medical device company. It works to design, develop and commercialize exoskeletons that offer people with mobility impairments the ability to stand and walk.
  • Rockwell Automation (NYSE:ROK): This company provides industrial automation power, control and information solutions through two segments: Architecture & Software and Control Products & Solutions. The former focuses on various hardware, software and communication components of Rockwell’s integrated control and information architecture, while the latter holds a range of products that perform multiple control disciplines and monitoring of applications.
Robotics Investing Start Cover

Robotics Will Change Everything! Can You Afford To Miss Out In The Robotics Market?

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How to invest in robotics: Robotics ETFs

For investors who would rather put their money into the robotics sector as a whole rather than a single company, exchange-traded funds (ETFs) may be the way to go. There are currently two robotics ETFs for investors to choose from, and they track a variety of companies in the industry.

  • Robo Global Robotics & Automation ETF (ARCA:ROBO): This ETF was the first robotics ETF to launch, with an inception date of October 22, 2013. It tracks companies involved in the robotics and automation industries; to be included, companies must receive a portion of their revenue from robotics and automation products, processes, services or devices. The ETF currently holds 83 companies, with its top holdings including iRhythym Technologies (NASDAQ:IRTC) and Brooks Automation (NASDAQ:BRKS).
  • Global X Robotics & Artificial Intelligence ETF (NASDAQ:BOTZ): Launched on September 12, 2016, this is the second robotics-related ETF. ETF.com states that it provides cross-sector exposure to companies that are working on developing and producing robotics and AI solutions through a market-cap-selected and weighted index. To be considered for the ETF, companies must earn a large portion of their revenue from robotics or AI. NVIDIA (NASDAQ:NVDA) and Intuitive Surgical (NASDAQ:ISRG) are among its top-weighted holdings.

In summary, the robotics industry isn’t going anywhere anytime soon and looks to have a wealth of investment heading its way. It seems likely to be an attractive space for investors for many years.

This is an updated version of an article originally published by the Investing News Network in 2017. 

Don’t forget to follow us @INN_Technology for real-time news updates!

Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.

Robotics Investing Start Cover

Robotics Will Change Everything! Can You Afford To Miss Out In The Robotics Market?

Leading-Edge Expert Advice In One Free Report To Help Prepare You For The Future.

Get Your Free Report Today!

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