There are trends that go together like peanut butter and jelly. Such is the case with robotics and artificial intelligence (AI).
The global robotics market was valued at $46 billion in 2023. However, at least one firm predicts this market will grow at a compound annual growth rate (CAGR) of 15.1% between 2024 and 2032, increasing its valuation to $169.8 billion.
And because of AI, that estimate feels conservative. AI applications are not only helping to meet the current demand for automation, but they will also fuel additional demand in the future.
The 2020 supply chain disruption has shown world governments the need to onshore their supply chains. However, in many cases, onshoring requires specialized labor that is in short supply. That supply-demand dynamic is already playing out in China, and other countries are now racing to keep up.
That's why it's a good time for investors to consider robotics stocks, particularly those that will likely get a boost from AI applications. In this special presentation, MarketBeat analyzes seven stocks to play this trend.
Quick Links
- NVIDIA
- Emerson Electric
- Deere & Co.
- RTX
- Thermo Fisher Scientific
- Intuitive Surgical
- Serve Robotics
#1 - NVIDIA (NASDAQ:NVDA)
If you’re looking for robotics stocks that will get a boost from AI, you can start with NVIDIA Corp. (NASDAQ: NVDA). Simply put, companies will need computing power to generate AI applications, and NVIDIA has built a sizable first-mover advantage.
However, NVIDIA is more than a picks-and-shovels play on robotics and AI. The company also offers its own AI robot development platform, NVIDIA Isaac, which consists of proprietary libraries, application frameworks, and AI models that can be used to “accelerate the development of AI robots such as autonomous mobile robots (AMRs), arms and manipulators, and humanoids.”
That’s a significant reason NVIDIA is investing in companies like Serve Robotics and why, despite concerns about potential future tariffs on semiconductor chips, NVDA stock continues to be a compelling long-term buy. The NVIDIA analyst forecasts on MarketBeat show that six analysts have increased their price targets on the stock, with KeyCorp offering the most bullish price target of $180.
About NVIDIA
NVIDIA Corporation provides graphics and compute and networking solutions in the United States, Taiwan, China, Hong Kong, and internationally. The Graphics segment offers GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU or vGPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems; and Omniverse software for building and operating metaverse and 3D internet applications.
Read More - Current Price
- $134.70
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 40 Buy Ratings, 3 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $164.15 (21.9% Upside)
#2 - Emerson Electric (NYSE:EMR)
Emerson Electric Co. (NYSE: EMR) is another robotics stock that can help you capitalize on the demand for AI. The basic thesis for owning EMR stock comes from the company’s second-quarter earnings presentation.
A headline in that deck read, “AI Driven Investments in Data Centers Heralds a Step Change in the Growth of Power in the U.S.” To support that statement, Emerson noted that the annual electricity consumption of U.S. data centers (measured in terawatt-hours TWh) would increase at a CARG of 22% between now and 2032.
This growth is starting to show up in the company’s revenue and earnings, which are showing solid year-over-year growth. In the last two quarters, earnings are up 56% and 24%, respectively. Analysts forecast that growth will slow to around 8% over the next 12 months, possibly reflecting concerns of a slowing economy.
However, for many value-oriented investors, EMR stock represents a low-risk investment in the long-term growth in this sector. Not only does the stock trade at an attractive 6x earnings, but the company is a dividend king that has increased its dividend for 67 consecutive years.
About Emerson Electric
Emerson Electric Co, a technology and software company, provides various solutions for customers in industrial, commercial, and consumer markets in the Americas, Asia, the Middle East, Africa, and Europe. It operates in six segments: Final Control, Control Systems & Software, Measurement & Analytical, AspenTech, Discrete Automation, and Safety & Productivity.
Read More - Current Price
- $124.09
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 13 Buy Ratings, 5 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $134.58 (8.5% Upside)
#3 - Deere & Co. (NYSE:DE)
Deere & Co. (NYSE: DE) is synonymous with their iconic heavy equipment. But the company is also one of the leading manufacturers of autonomous agricultural equipment. The emerging labor shortage is particularly acute on farmland.
Deere offers a number of precision agricultural solutions, including GPS-equipped tractors, smart planting techniques, and data analysis farming tools. Not only can these help farmers to be more efficient, they can also contribute to conservation efforts.
DE stock is down over 14% in the last 12 months and over 6% in 2024. The stock is particularly sensitive to commodity prices and interest rates, both of which have increased sharply. Plus, the company is going through a normal downturn after demand for the company’s products accelerated in 2021.
However, with interest rates forecasted to move lower by the end of the year, Deere could be a compelling investment. The stock trades at just 14x forward earnings, and analysts forecast a 14% upside for DE stock.
About Deere & Company
Deere & Company engages in the manufacture and distribution of various equipment worldwide. The company operates through four segments: Production and Precision Agriculture, Small Agriculture and Turf, Construction and Forestry, and Financial Services. The Production and Precision Agriculture segment provides large and medium tractors, combines, cotton pickers and strippers, sugarcane harvesters and loaders, harvesting front-end equipment, pull-behind scrapers, and tillage and seeding equipment, as well as application equipment, including sprayers and nutrient management, and soil preparation machinery for grain growers.
Read More - Current Price
- $432.49
- Consensus Rating
- Hold
- Ratings Breakdown
- 9 Buy Ratings, 13 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $443.94 (2.6% Upside)
#4 - RTX (NYSE:RTX)
RTX (NYSE: RTX), formerly known as Raytheon Technologies Corporation, is a leading aerospace and defense company. RTX stock is up 22% in 2024. Most of that boost is ascribed to geopolitical tensions, which create demand for the company’s products and systems. In the company’s earnings presentation, it notes that spending on defense products is up 7% in 2024.
However, the company is also an important name to watch in the areas of robotics and AI. In April 2023, RTX launched RAIVEN, its revolutionary electro-optical intelligent-sensing capability. The technology is designed to “enable pilots to have faster and more precise threat identification.”
The RTX analyst forecast on MarketBeat shows about half a dozen companies boosting their price targets on RTX stock. The most notable of these was Wells Fargo & Co., which boosted its price target from $119 to $141 while maintaining its Overweight rating on the stock.
About RTX
RTX Corporation, an aerospace and defense company, provides systems and services for the commercial, military, and government customers in the United States and internationally. It operates through three segments: Collins Aerospace, Pratt & Whitney, and Raytheon. The Collins Aerospace Systems segment offers aerospace and defense products, and aftermarket service solutions for civil and military aircraft manufacturers and commercial airlines, as well as regional, business, and general aviation, defense, and commercial space operations.
Read More - Current Price
- $116.48
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 7 Buy Ratings, 7 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $177.93 (52.8% Upside)
#5 - Thermo Fisher Scientific (NYSE:TMO)
Biotechnology, and particularly gene editing, is a key area expected to benefit from robotics and AI. As gene editing technology becomes a reality, there will be an increasing demand for DNA extraction. Thermo Fisher Scientific Inc. (NYSE: TMO) excels in this area.
The company supplies robots that are designed to automate research tasks that require a high degree of precision and adaptability. To that end, Thermo Fisher is forecasting revenue from its Laboratory Products and Biopharma division to reach $22.8 billion, which is approximately 50% of the company’s total revenue.
TMO stock is flat in 2024 so far. However, on two separate occasions, it has hit resistance right around the $600 price level. The consensus of analysts tracked by MarketBeat indicates that the stock may hit that level in the next 12 months. In April, HSBC offered a price target of $670 for the stock.
About Thermo Fisher Scientific
Thermo Fisher Scientific Inc provides life sciences solutions, analytical instruments, specialty diagnostics, and laboratory products and biopharma services in the North America, Europe, Asia-Pacific, and internationally. The company's Life Sciences Solutions segment offers reagents, instruments, and consumables for biological and medical research, discovery, and production of drugs and vaccines, as well as diagnosis of infections and diseases; and solutions include biosciences, genetic sciences, and bio production to pharmaceutical, biotechnology, agricultural, clinical, healthcare, academic, and government markets.
Read More - Current Price
- $524.05
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 17 Buy Ratings, 4 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $652.30 (24.5% Upside)
#6 - Intuitive Surgical (NASDAQ:ISRG)
Intuitive Surgical Inc. (NASDAQ: ISRG) is a leader in robotic-assisted surgical systems. The company’s da Vinci robots are a popular choice among surgeons for their accuracy, flexibility, and the visualization they provide.
Robotic-assisted surgery is gaining acceptance. That acceptance comes at a price that could be impacted by higher interest rates. But that doesn’t seem to be the case for Intuitive Surgical, which is posting impressive year-over-year revenue and margin growth.
It’s also the reason why investors may want to wait for a better entry point before buying ISRG stock, which is up 34% in 2024. This has just pushed the company’s stock higher in the last 12 months, pushing it to the top of its 52-week range, and short interest has increased by 20% in the last month.
On the other hand, on July 19, 2024, analysts from Stifel Nicolas and JPMorgan Chase & Co. increased their price targets for ISRG stock to $475 and $495, respectively.
About Intuitive Surgical
Intuitive Surgical, Inc develops, manufactures, and markets products that enable physicians and healthcare providers to enhance the quality of and access to minimally invasive care in the United States and internationally. The company offers the da Vinci Surgical System that enables complex surgery using a minimally invasive approach; and Ion endoluminal system, which extends its commercial offerings beyond surgery into diagnostic procedures enabling minimally invasive biopsies in the lung.
Read More - Current Price
- $524.43
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 15 Buy Ratings, 3 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $554.17 (5.7% Upside)
#7 - Serve Robotics (NASDAQ:SERV)
Serve Robotics Inc. (NASDAQ: SERV) is a name to consider if you have an appetite for the opportunity in small-cap stocks. Serve Robotics is one of the leading names in robotic last-mile delivery. Specifically, the company manufactures low-emission, self-driving urban delivery robots.
Serve Robotics is already deploying vehicles in the Los Angeles market, where it serves approximately 300 restaurants. In 2025, the company plans to deploy 2,000 robots as part of a contract with Uber Eats and expand into additional markets.
The company made its public debut in April 2024 after going public as a SPAC company. It’s generating little revenue and is not profitable. However, in July 2024, SERV stock surged over 220% on news of an additional investment from NVIDIA, one of the company’s largest investors. This move was largely enabled by the company’s size and low float mixed with a surge in trading volume.
That said, this may not be a time to take a long position in SERV stock, but it may be time to add the company to your watch list to find a better entry point.
About Serve Robotics
Serve Robotics Inc designs, develops, and operates low-emission robots that serve people in public spaces with food delivery in the United States. It builds self-driving delivery robots. The company was formerly known as Patricia Acquisition Corp. and changed its name to Serve Robotics Inc in July 2023.
Read More - Current Price
- $14.61
- Consensus Rating
- Strong Buy
- Ratings Breakdown
- 5 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $16.00 (9.5% Upside)
Many investors may be scared off by a field like robotics. It's a fast-moving industry, and many companies trade at premium valuations. And when you combine robotics with AI, the growth is even more impressive.
If this presentation has increased your interest in this sector but you're unwilling to invest in any single stock, there are several thematic ETFs that focus on both robotics and AI. For example, the Global X Artificial Intelligence & Technology ETF (NASDAQ: AIQ) is up 24% in the last 12 months and 14% in 2024.
However, as this presentation shows, many individual companies have generated a return much higher than 24%. And some of those companies offer a dividend that can make your total return even higher.
MarketBeat has the tools to give you up-to-date, relevant information on these stocks or any other stocks you may like. When you add one or more of those stocks to your watchlist, you'll get updates by text or email anytime there's news that may affect its price
More Investing Slideshows:
