Robotics is one of the biggest multi-year trends that investors should monitor. Sure, the current investing scenario beckons caution, but it’s tough to overlook the incredible long-term potential of robotics, AI, and other disruptive technologies. Robotics stocks, in particular, could become multibagger investments in the not-so-distant future.
Consider the figures! Maverick entrepreneur Elon Musk suggests that by 2040, we might see one billion humanoid robots. Though it’s best to take that estimate with a grain of salt, among other statements from Musk, even a fraction of that number could be massive.
Moreover, according to Mordor Intelligence, the robotics industry is expected to surge almost 16% from $45.85 billion in 2024 to $95.93 billion by 2029. Additionally, the convergence of robotics with AI, IoT, and a slew of other technologies signals a “ka-ching!” for those willing to stomach the risk. That said, three robotics stocks offer the most upside potential.
Robotics Stocks: Alphabet (GOOG, GOOGL)
Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is a tech titan best known for its ubiquitous search engine in Google and its cloud computing arm. However, it would be unfair to limit its scope to two of its cash cows, considering its impact across several tech verticals. Robotics and AI are two areas that could potentially dictate the company’s future. Over the past year or so, we’ve seen how generative AI took Alphabet stock to multi-year highs. Perhaps we could see a similar breakout with the proliferation of robotics.
Through its subsidiaries like Google DeepMind and Intrinsic, Alphabet is looking to spearhead the race to advancing AI-powered robotics. It’s looking to enhance its robotics capabilities by leveraging transformative models like RT-2, similar to the large-language models (LLM) powering AI chatbots. RT-2 is essentially a vision-language-action (VLA) model that harnesses the power of AI to help robots understand and perform tasks by integrating vision, language, and action. Simply put, Alphabet is pushing the boundaries of what’s possible with robotics through AI integration, making it significantly more accessible.
Symbotic (SYM)
Symbotic (NASDAQ:SYM) is one of the top pure-plays in robotics that garnered significant investor interest last year. SYM stock gained over 44% last year and has been ticking in the green in the past six months. The risk-on sentiment was a huge part of its rally, but it would be unfair not to mention its stellar quarterly performances last year.
Its top-line grew at a rapid clip last year, with its revenue surging 98% to $1.17 billion in fiscal 2023 compared to the prior-year period. Similarly, its net loss improved to $23.9 million, approximately a 107% improvement from the same period last year. Moreover, four out of the past five consecutive quarters, it has beaten estimates across both lines by comfortable margins. Also, it boasts tremendous financial flexibility, with its total cash and short-term investments jumping from $58.3 million in fiscal 2020 to $675 million as per its latest report.
Industrial robotics is already massive, and Symbotic’s position as a leading automation technology provider positions it for robust long-term gains.
Tesla (TSLA)
Tesla (NASDAQ:TSLA) stock is back in the green again, gaining almost 24% in the past week. It got the thumbs up for full self-driving (FSD) in China, and its strategy to launch a more economically-priced vehicle resulted in its largest stock price bump in months. However, the short-term rally in TSLA stock isn’t enough to convince investors of its long-term positioning.
Tesla doesn’t have the aura in the EV niche anymore, with the market getting significantly more competitive in recent years. Hence, the company needs to think outside the box and add new layers to its illustrious growth story. Autonomous driving could be a huge catalyst in this regard, as could its foray into robotics.
Musk has raved about the Optimus Robot, or the Tesla Bot, to play a critical role in Tesla’s future value proposition. Additionally, the technology used for autonomous driving is transferable to its humanoid robots, creating significant synergies. Also, the company plans to initially deploy its robots to its manufacturing operations before marketing them to a wider audience. If its robot experiment swells, it can take it to the next level, potentially adding billions to its top line.
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.