3 Underrated Robotics Stocks Poised for Major Growth

Key Points

• Robotics is a rapidly developing field incorporating the latest in AI and automation technology to create opportunities for applications across sectors.
• Emerging companies in this space include defense contractor AeroVironment, machine vision firm Cognex, and medical device company Myomo.
• All three of these firms present strong product lineups for their respective industries, making them notable companies to watch in the robotics space.

The days of robots being primarily limited to manufacturing applications are long gone—the industry is expanding rapidly and becoming integrated into many different sectors thanks to rapid developments in AI and automation. Analysts expect this to lead to major growth for the industry in the years to come, with an anticipated CAGR of more than 15% in the coming seven years to reach a size of nearly $170 billion globally by 2032.

As with AI and other fast-changing technology spaces, robotics is home to both more established firms that are venturing into the space—Japanese conglomerate Mitsubishi and even major tech firms like NVIDIA Corp. NASDAQ: NVDA are linked with the robotics industry, for example—as well as smaller specialized companies. As the robotics landscape shifts, it's likely that some of these smaller names may emerge as increasingly important players.

Though time will tell how the robotics space develops, three underrated companies that are worth keeping an eye on include AeroVironment Inc. NASDAQ: AVAV, Cognex Corp. NASDAQ: CGNX, and Myomo Inc. NYSEAMERICAN: MYO.

AeroVironment: Good Positioning For Military Applications

AeroVironment is a defense company developing and manufacturing drones and related robotics systems, among other systems for military use. The company's products are experiencing surging demand as global political tensions increase, as well as combat trends toward unmanned vehicles and the integration of AI into battle scenarios. The company's loitering systems—which allow unmanned systems to remain engaged while undetected until an appropriate time for activation—have been especially popular. AeroVironment announced in mid-January 2025 that it had received a second delivery order from the U.S. Army for a long-term contract with a ceiling value of nearly $1 billion.

AeroVironment's most recent quarter saw a 4% year-over-year increase in revenue to nearly $189 million and a 25% sequential increase in funded backlog. Further, the company's November 2024 acquisition of space and defense tech firm BlueHalo is likely to continue to bear fruit as it bolsters AeroVironment's technology capabilities, partnerships, and product list.

Cognex: Broadly Applicable Machine Vision Tools

Robots have long been used in manufacturing and distribution settings, but Cognex's machine vision products are revolutionizing their applications in these areas. Among other offerings, its DataMan barcode readers are broadly beneficial across industries, allowing increases in operational efficiency for many settings in which barcode scanning takes place.

In some ways, Cognex has yet to take off from an investment standpoint. The company's revenues have remained largely stagnant, and its 2023 purchase of Moritex was costly. Still, Cognex has a strong cash position, which will buy it time for its latest products to reach their full potential. Shares of CGNX are up about 11% in the last year through Jan. 31, 2025, but down relative to a spike in July. Though they remain pricey, it could be a time to buy on a relative dip. Based on consensus estimates, analysts expect the price of CGNX stock to rise by about 20%.

Myomo: Analysts See Nearly 38% Upside

Myomo is a wearable medical device company manufacturing myoelectric orthotics, including braces, to aid stroke victims in regaining motion and control over their limbs. The company has found a significant foothold with its products, with revenue surging by 81% year-over-year in the most recent quarter. Orders, backlog, and number of individuals in the patient pipeline were also up significantly over that time period, further reflecting the popularity and Myomo's products.

A challenge for Myomo is profitability. The firm remains unprofitable, but its gross margin is improving considerably—by 670 basis points to 75.4% in the last quarter. While the global orthotics market is estimated at close to $7 billion, it is also established with legacy firms, presenting an uphill battle for Myomo to gain market share. Still, its products are favorably classified for the purposes of Medicare reimbursements, making Myomo increasingly accessible to potential patients.

Myomo's recent $15-million public offering is expected to boost advertising expenses and employee headcount in a bid to prepare for increased demand and revenue growth. Four analysts have rated Myomo a Buy, seeing upside potential of nearly 38% based on the share price as of January 31, 2025.