Now that the FED is proposing to cut interest rates this year, there are additional reasons for you to expect a breakout of the manufacturing sector in the United States, which will, of course, require these new robotics and automation technologies to aid in the increasing efforts to meet a newfound demand wave.
Here are three robotics stocks into which you could rotate some of your portfolio exposure, hoping to ride on the tailwinds of these expanding global trends and the inevitable adoption of robotics and A.I. into a boring space like industrials. Needless to say, these could turn a small investment like $10,000 into $1 million given enough time to play out on their key role for the global economy.
Rockwell Automation (ROK)
Trading at only 79.0% of its 52-week high, Rockwell Automation (NYSE: ROK) is one stock that could quickly start to build a lengthy case for it. Because this company opens up a path for industrial automation and robotics not only in the U.S. but in Europe, Asia, and Latin America, you can be assured that the only way financials will go is up.
Market cap (the size of a company) can sometimes be a leading indicator of what the market thinks of the business today. Considering that Rockwell has grown to a $31.5 billion market cap, the market is rewarding this stock with the confidence that is typically found in groups of stocks that are this big.
On the topic of size, the biggest companies don’t typically grow any higher than high single-digits when it comes to EPS, so the fact that analysts are expecting close to 9.0% growth in the next 12 months is a good sign in them pushing the upper end of the band.
To top the list of goodwill that this company is building in the current cycle, it has also led a new project into carbon capture and removal. This could be one of the reasons why Morningstar Investment Services added 98.9% to its stake in the company.
In only the past decade, this stock has more than tripled from 2014 to 2024, whic is no small feat. The truth is, there is no telling just how many times over an investment like $10,000 could keep doubling in this stock. It may even reach $1 million before you know it. Sure, this only stops from happening if the world stops manufacturing things, which is not likely.
NVIDIA (NVDA)
This is one stock that needs very little -if any -introduction. It isconsidered by The Goldman Sachs Group (NYSE: GS) to be the most important stock on planet earth today. NVIDIA (NASDAQ: NVDA) is a name that keeps on breaking past its previous all-time highs with virtually no issues or obstacles to stand in its way.
People thought that the company’s outlooks for the latest quarter were a bit on the overextended side of things. However, a bull market is a bull market, and you can’t ever think of going against the king of the pack today. NVIDIA beat earnings by increasing their outlooks for the next quarter and the rest of the year.
Okay, so most people think of NVIDIA chips applying to laptops and PCs only; well, not many people know about their GPU capabilities that aid the enhancement of engineering and design of anything from the end product to the actual factory blueprints where these products will be made.
This could be one of the many reasons analysts are projecting up to 68.5% EPS growth in the next twelve months. This will leave a higher ceiling to by this massively bullish stock.
Against all bearish odds, this stock keeps running out of room on the chart, since it just keeps going up and to the right. If you had invested only $10,000 back in 2022, two years later you would wake up to see a balance of nearly $100,000. How many years do you think it’ll take to reach $1 million if demand for NVDA chips keeps going the way it has? If you only buy one of these robotics stocks, make sure it is this one.
Emerson Electric (EMR)
Going back to the large-capitalization example, brand moats and penetration come to bring Emerson Electric (NYSE: EMR) a massive $60.0 billion market capitalization. Despite its massive size, this ship can still take quick turns relative to other businesses of this age and size.
As of their last quarterly earnings results, the company beat on their previous revenue guidance of 6.5% to 8.5% and actually delivered a staggering 10.0% jump over the past twelve months. Also, a $1.22 earnings per share came close to 20.0% above previously guided figures.
Based on the previously reported momentum, management is now comfortably forecasting another round of double-digit growth for the next quarter and for 2024 as a whole, showing their awareness of the manufacturing sector’s needs in increasing their technology exposure within their processes.
Of course, big behemoths like Emerson don’t have much of price action, but you know what they do have? Cash flow, lots and lots of cash flow, which you bet they will start deploying into share buyback programs, which could turn a hypothetical investment of $10,000 closer to $1 million than you think given enough time.
Sounds too good to be true? Well, just ask Warren Buffett what his experience has been with large companies that regularly buy back their stock! Do yourself a favor and grab all of these robotics stocks.
As of this writing, Gabriel Osorio-Mazzilli 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 InvestorPlace.com Publishing Guidelines
Gabriel Osorio is a former Goldman Sachs and Citigroup employee. He possesses discipline in bottom-up value investing and volatility-based long/short equities trading.