Stocks to buy

If You Can Only Buy One Robotics Stock in December, It Better Be One of These 3 Names

With demand for automation expected to continue growing rapidly, it’s easy to see why investors continue to be intrigued by robotics stocks. Businesses of all sizes are expected to continue to invest in automation to automate tasks and reduce costs. 

Increasing labor costs are driving increased demand for automation overall. Firms are increasingly looking to reduce the costs associated with that labor force in particular. Therefore, automation remains a prime target.

Further, the advent of artificial intelligence (AI) and machine learning served to increase that demand. Industry experts expect AI will speed the development of robotics and automation to a much faster degree. Let’s look at a handful of stable investments in that space.

Rockwell Automation (ROK)

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Rockwell Automation (NYSE:ROK) represents a few important characteristics that automation investors seek in a stock. First of all, the company is a pure-play automation firm. Therefore, it exposes investors to strong returns based on the overall sector growth. Second of all, ROK shares are quite stable and are trading nearer to their 52-week low than their high.

Rockwell Automation is a particularly strong stock to consider in the automation space in light of its recent performance. The company reported earnings on November 2nd that indicated the company is doing very well. Revenues increased 25% during the period, reaching $2.275 billion.

The company’s net income figures were particularly impressive. A year ago, the company reported $53.9 million in earnings. That figure increased to $300 million due to increased sales along with higher pre-tax margins.

Rockwell Automation’s recent strong performance, future outlook and stable nature make it a great choice among automation stocks. It’s also a good choice for income investors and provides a dividend yielding 1.82%.

Intuitive Surgical (ISRG)

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Intuitive Surgical (NASDAQ:ISRG) is best known for its da Vinci surgical robots. The robots are used to perform minimally invasive procedures and continue to be in high demand.

There are two primary reasons to consider investing in Intuitive Surgical at the moment. First of all, it’s reasonable to anticipate that demand for da Vinci systems will only get stronger. The reason is that AI is fundamentally changing medicine. The application of this technology to its robotics systems is exciting. AI can be used to determine more optimal procedures than was previously possible. The da Vinci system is a prime beneficiary of that potential period.

In fact, Intuitive Surgical is already growing with or without AI. Da Vinci procedures have grown at a compound annual growth rate of 17% between Q3 2019 and Q3 2023. Further, the company continues to place more of its systems in the locations of healthcare providers. In the third quarter, Intuitive Surgical placed 312 da Vinci systems. A year earlier, the company placed 305 such systems.

Nvidia (NVDA)

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Nvidia’s (NASDAQ:NVDA) leading-edge semiconductors are applicable across almost every technological sector. That includes robotics. Thus, it should be no surprise that Nvidia stock is recommended among the very best robotics equities overall.

Firms across every sector have scrambled to secure their supply of Nvidia’s H100 chips during 2023. Companies remain unwilling to settle for the alternatives. The stakes are simply too high in the early stages of the AI gold rush. Nvidia’s chips perform faster and are more capable overall. That can mean the difference between success and failure.

Those chips have found wide application in training automated robots to do multiple tasks. For example, Nvidia’s chips are well suited to tasks including robot perception training as well as navigation training. 

Nvidia is only going to get stronger in this regard. The company recently announced it will release its H200 chips in the second quarter of 2024. The H200 chip will be even more capable than the H100 chip. Thus, it should be very well received. It’s logical to anticipate that firms across every industry, robotics included, will scramble to secure their supply of those chips.

On the date of publication, Alex Sirois 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 Publishing Guidelines.

Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.

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