The AI boom and Tesla’s recent WeRobot event have fueled excitement for a relatively under-discussed industry: robotics. Could it be the next big stock market trend?
Robotics is emerging as an increasingly crucial sector in the global technology landscape. Despite some stumbles, as seen in the Tesla event, the potential for growth and innovation is undeniable.
As investors wonder what the next megatrend after AI will be, robotics presents itself as a compelling answer. But which stocks are closest to this segment of modern technology? Starting from the study of the most important active funds and ETFs, some interesting answers emerge.
Why is interest in robotics rising?
In recent years, artificial intelligence (AI) has captured global attention, generating a wave of innovation and major movements in the financial markets, with companies like NVIDIA seeing their stocks reach new all-time highs. However, robotics could be the next big tech field poised to explode, and Tesla’s “We, Robot” event in October 2024 has only fueled the excitement.
At the event, Tesla unveiled its humanoid robot Optimus, which interacted with guests, serving drinks and even dancing. However, a scandal emerged shortly after the event: despite Elon Musk promising autonomous robots, it turned out that many of them were actually remote-controlled by humans.
Several videos posted on social media showed that the robots’ movements were being assisted by Tesla employees, highlighting that full autonomy was still a long way off. While this revelation was met with some disappointment, the excitement around robotics has not dimmed. On the contrary, the demonstration, although partially artificial, has shown enormous potential for the evolution of robotic applications combined with AI, sparking the interest of investors and professionals.
But what is robotics really?
Robots, as described in Isaac Asimov’s Laws of Robotics, are machines that can be programmed to perform physical or mental tasks in place of humans. The dream of a world in which robots can perform complex tasks is rooted not only in science fiction but also in the vision of contemporary technological pioneers.
Today it is undeniable: the progress of robotics is closely linked to the evolution of AI, since the ability of robots to interact with the environment, learn, and adapt to situations depends largely on artificial intelligence. The recent evolution of AI solutions is therefore leading to an increase in the growth potential of robotics as well.
Possible future developments
When we think about the robotics of the future, we are often fascinated by humanoid figures, convinced that they represent the beginning of the robotic revolution. In reality, we have been living with robots for decades, and their impact is tangible in different areas such as industry, healthcare, and domestic life.
For example, Fanuc, a major player in industrial robotics, has already installed over 24 million robots worldwide. Demand for industrial robots continues to grow: according to the International Federation of Robotics (IFR), more than 500,000 new industrial robots will be installed in 2022, with an expected annual growth of 6% through 2025.
In the healthcare sector, the da Vinci system, developed by Intuitive Surgical, has revolutionized minimally invasive surgery, with more than 7 million operations performed since its launch. This robotic system is now used in more than 5,500 hospitals worldwide, offering greater precision and faster recovery for patients.
Another area of strong growth is that of service robots, particularly for care for the elderly. In countries like Japan, where the population is aging, the market for elderly care robots is expected to reach $3 billion by 2025.
Home robots are also becoming more common, albeit in less "humanoid" forms than those imagined in science fiction. A concrete example is the Roomba robot vacuum cleaner from iRobot, which has sold over 40 million units worldwide. This is just the beginning: the global home robotics market is set to reach a value of $30 billion by 2026, with a compound annual growth rate of 20%.
How to Invest in Robotics with Active Funds and ETFs
One of the most well-known active investment funds in the sector is Pictet Robotics, which, although it does not systematically outperform the reference market, remains an interesting starting point for those who want to do stock picking in the sector. The top three companies by capitalization within the fund are:
1. Fanuc Corporation: A Japanese leader in the field of industrial robots, with a strong global presence. Fanuc has a P/E ratio (price/earnings ratio) of around 22, with high-profit margins thanks to its operational efficiency.
2. ABB Ltd.: A Swiss multinational, among the leaders in the field of robotics and industrial automation, with a focus on AI applied to robotics to improve productivity.
3. Keyence Corporation: Another Japanese company, specialized in sensors and artificial vision systems, crucial for the operation of many industrial robots.
For those who prefer more passive instruments, the most famous ETF linked to robotics is the Global X Robotics & Artificial Intelligence ETF (BOTZ) Comparing the top three caps of BOTZ with those of Pictet Robotics, it emerges that there is an overlap with Fanuc, but the Global X fund also includes companies such as:
- Intuitive Surgical: Leader in the field of robotic surgery, with a high P/E ratio, reflecting its long-term growth prospects thanks to the increase in robotic surgical procedures.
- NVIDIA: Well known for the production of chips used in AI and robotics, a stock already at the center of attention for AI investments.
Original article published on Money.it Italy 2024-10-22 12:47:00. Original title: Altro che AI. Il prossimo megatrend sarà la robotica
