Wondering how to invest in robotics? Here’s a brief overview of how to get involved in this growing tech market.
The robotics industry is one of the vastest markets in the technology space today, with applications across diverse sectors. Unsurprisingly, some are predicting that a “robot revolution” will completely change the global economy over the next 20 years or so.
In simple terms, robotics is defined as the “science and technology behind the design, manufacturing and application of robots.” Robots themselves are described as devices that can perform tasks the same way people do, but without the assistance of human interaction.
With the rise of robotics all but guaranteed, the Investing News Network has put together a brief overview of the sector, and how to invest in robotics for beginners.
How to invest in robotics: Global robotics market overview
The global robotics market was worth about $71 billion in 2015, according to International Data. At the time, the firm projected that worldwide spending on robotics and other related services would reach roughly $135 million by 2019, representing a compound annual growth rate (CAGR) of 17 percent.
Since then, Mordor Intelligence has published a report on the robotics market that forecasts that its CAGR from 2018 to 2023 will be 24.52 percent. The firm predicts that the robotics market will play a key role in the coming age of automation, with smart factories already increasing demand for robots.
It also cites rising demand for surgical robotics and increased research in this niche market by universities looking to further develop the field and revolutionize medical surgeries.
Additionally, Mordor Intelligence points out that industrial robots are the largest segment of the market, with articulated robots being “highly suitable for various industrial applications, such as pick and place, palletizing, painting, and welding.”
The automotive segment is another key component to look at. With greater safety concerns and higher standards for quality, automation is being seen as a viable option for progressive production.
The firm states that “[i]nvestments in new production facilities in the emerging markets, as well as investments in major car producing countries, have driven an increase in the number of robot installations. Using new materials, developing energy efficient drive systems, and intense competition in all the major car markets, have bolstered investments, despite the existing overcapacities.”
Based on these reports, it seems as though the robotics sector is going to grow significantly as it takes its place in a variety of sectors requiring automation.
How to invest in robotics: Robotics stocks
For investors looking to enter the robotics space, stocks may be a good place to start. Stocks are generally the more popular route to take when it comes to investment opportunities, and there’s certainly no shortage of them to choose. Major companies in the robotics sector include:
- Cognex (NASDAQ:CGNX): Cognex provides machine-vision products that obtain and analyze visual information in order to automate tasks where vision is needed. Cognex also offers machine-vision technologies, which are used to automate the manufacturing and tracking of discrete items, including mobile phones, medications and automobile tires.
- iRobot (NASDAQ:IRBT): As its name suggests, iRobot is a consumer robot company that designs and build robots. Its portfolio includes concepts in mapping, navigation, mobility and artificial intelligence. It is also famously known for creating the Roomba, a floor-vacuuming robot.
- Mazor Robotics (NASDAQ:MZOR): Mazor Robotics is a medical device company that develops computerized and imaging-based systems in the field of spine surgery. The company’s Renaissance Surgical Guidance System allows surgeons to move from freehand surgical procedures to guided procedures. Mazor also developed the Renaissance Brain Module, which provides control over inserting surgical instruments during brain surgery.
- Rewalk Robotics (NASDAQ:RWLK): Rewalk Robotics is another medical device company. It works to design, develop and commercialize exoskeletons that allow people with mobility impairments the ability to stand and walk.
- Rockwell Automation (NYSE:ROK): This company provides industrial automation power, control and information solutions through two segments: Architecture & Software and Control Products & Solutions. The former focuses on various hardware, software and communication components of Rockwell’s integrated control and information architecture, while the latter holds a range of products that perform multiple control disciplines and monitoring of applications.
How to invest in robotics: Robotics ETFs
For investors who would rather put their money into the robotics sector as a whole rather than a single company, ETFs may be the way to go. There are currently two robotics ETFs for investors to choose from, and they track a variety of companies in the industry.
- Robo Global Robotics & Automation ETF (ARCA:ROBO): This ETF was the first robotics ETF to launch, with an inception date of October 22, 2013. The Robo Global Robotics ETF tracks companies involved in the robotics and automation industry; to be included, companies must receive a portion of their revenue from robotics and automation products, processes, services or devices. The ETF currently holds 89 companies, with its top publicly traded firm being iRobot (NASDAQ:IRBT).
- Global X Robotics & Artificial Intelligence ETF (NASDAQ:BOTZ): Global X Robotics is the second robotics-related ETF, and it launched on September 12, 2016. ETF.com states that it provides “cross-sector” exposure to companies that are working on developing and producing robotics and artificial intelligence solutions through a market-cap-selected and weighted index. To be considered for the ETF, companies must earn a large portion of their revenue from robotics or artificial intelligence. Intuitive Surgical (NASDAQ:ISRG) is its top weighted holding.
In sum, the robotics industry isn’t going anywhere anytime soon and has a wealth of investment heading its way in the coming years. It seems likely to be an attractive space for investors for many years to come.
Now that you know a bit more about how to invest in robotics, will you take the plunge?
This is an updated version of an article originally published by the Investing News Network in 2017.
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Securities Disclosure: I, Amanda Kay, hold no direct investment interest in any company mentioned in this article.