How to Invest in Robotics

Global robotics market overview

A Transparency Market Research report estimates that the global market for robots with artificial intelligence (AI) will be $8.18 billion in 2021. Analysts predict the industry could reach $52.63 billion by 2031, with an average annual market growth rate of 20.5% from 2022 to 2031. Robots bring automation and increase the level of efficiency of various production processes. Artificial intelligence is being used to advance science and technology because of its ability to handle big complex data and provide solutions for highly accurate and fast processing. Companies are evaluating the long-term revenue opportunities from artificial intelligence robots because of the growing need for automation in the manufacturing, automotive and industrial sectors.

Robotics trends and innovations in 2022

The robotics industry is constantly evolving, with innovations every year. 2022 was the year of robotics, transformations in development, implementation, financing, and mergers and acquisitions in the robotics industry. This year, all signs indicate rapid growth in robotics over the next ten years. Robotics has revolutionized the industry. These 14 innovative robotics trends for 2022 are changing the industry in response to the historical challenges of the past few years. As Industry 4.0 takes full shape in many sectors, these trends are shaping the future of robotics.

Growth of investment in robotics companies and robotics startups

Investors continue to fund the latest robotics innovations in various industries, including medicine, manufacturing, logistics, hospitality, and automotive. With plenty of money in the market, venture capital (VC), private equity (PE), and strategic investors are looking to capitalize on and guide the development of breakthrough robotics technologies. Labor shortages and interrupted supply networks accelerate robotics demand in the industrial sector. According to Fortune Business Insights, the global market for industrial robots is anticipated to increase from $14.61 billion in 2020 to $31.13 billion by 2028.

"Smart” factories and robotics

Using several combinations of advanced robotics technology to create highly flexible, self-adaptive manufacturing facilities, known as the "smart factory," is already in use in some countries worldwide. Industrial robots and automated solutions will assist assembly lines, and smart factories will become the standard. As a result, we may anticipate production processes that are quicker, more effective, and more precise, with fewer mistakes. Future interactions between robots and autonomous mobile robots (AMRs) will require less upkeep and human involvement.

Collaborative robots (cobots)

In the workplace, cobots and helpful robots are in the spotlight. Full automation is something that many businesses desire, but the cost of doing so might be exorbitant. There are many tasks that robots cannot perform as well as humans at this stage. Thus, innovative companies are looking for solutions that leverage the best of what humans and robots have to offer. More and more companies are using cobots to supplement their staff and meet demand, even with a small team. The reality is that robots help people work more accessible and safer, while robots fill empty roles. Unlike the average robot, cobots are designed to work with people, not in isolation. It allows businesses to combine the strengths of human employees with the forces of robots. Not only do cobots make employees work safer, but they also increase productivity, which is one of the main reasons for their success today. Companies are also looking to cobots (robots that collaborate with people) to increase productivity and security by taking on tedious, risky, or messy tasks. Industrial robot use in factories has almost doubled globally in the last five years, and by 2025, cobot sales in North America are predicted to increase from 3% to 34% of all robot sales.

The growth of RPA adoption in robotics

Robotic Process Automation (RPA). The advantages of robotic process automation are hard to dispute, especially given how RPA is developing. RPA improves quality control, reduces costs, increases efficiency, and has many other essential benefits. The 2020s will see significant growth in RPA adoption, but in particular, this is one of the crucial developments of 2022. According to analysts, the worldwide RPA industry will be valued at more than $29.3 billion by 2030 and expand at an impressive average annual growth rate of 27.7%, which is higher than the pace of growth for many other technologies. RPA growth is also tied to developing peripheral robotics technologies such as cobots and artificial intelligence.

Robot employees (robot employees)

Like cobots, robot employees are a trend emerging in response to the pandemic. The COVID-19 virus initially forced companies to reduce employee contact with customers for security reasons. However, in the second half of the pandemic and beyond, staffing shortages became a more acute problem for many businesses. As a result, robots are beginning to occupy unfilled jobs, even in roles once thought impossible to automate. An excellent example is the autonomous delivery robots that deliver food and other small online orders. They have become so popular that several states have written laws defining where robots can and cannot work. With record high demand for same-day orders for everything from food to electronics, delivery robots are meeting the equally high demand for drivers.

Robots as a Service (RaaS)

By a recent study, the global market for robotics as a service (RaaS) was estimated to be worth $12.6 billion in 2020 and is projected to reach $41.3 billion by 2028, growing at a 15.9% compound annual growth rate during the projection period (2021-2028). Some of the most significant constraints for smaller companies to incorporate robotics into their manufacturing facilities have been employee experience and high initial investment. However, with the rise of the all-as-a-service (*aaS) trend, that problem no longer exists. Companies can now take advantage of RPA with robots-as-a-service (RaaS) models.

Investing Tools

The robotics sector is increasing as it takes place in many industries requiring automation.

Robotics stocks

You can turn to online brokers, robot advisors, or even finance with your employer to invest in robotics stocks. Purchasing a stock using an online stock broker and doing it straight from the business is the simplest method. How to buy stocks from an online stock broker. Here are the steps to take:

  • Choose a broker, register, and fund your account.
  • Research the stock you want to buy. Your goal in doing this research is simple - you are looking for a company you wish to co-own.
  • Decide how much stock to buy. Depending on your portfolio, this is relatively easy to decide.

Robotics ETFs

An Exchange Traded Funds (ETF) is a type of security that tracks an index, sector, community, or another asset, but you can buy or sell on a stock exchange just like a regular stock.

ETFs are the right choice for investors who would prefer to invest their money in the robotics sector as a whole rather than in an individual company. Investors can currently choose from two ETFs and track different companies in the industry.

Robo Global Robotics and Automation ETF (ARCA: ROBO) - This ETF was the first robotics ETF launched. It tracks robotics and automation companies; to be included, companies must derive a portion of their revenue from robotics and automation products, processes, services, or devices. There are currently 86 companies included in this ETF, including Cognex and Vocera Communications.

Global X Robotics & Artificial Intelligence ETF - This was launched on September 12, 2016. It is the second ETF related to robotics. It provides information about companies that work on the development and production of robotics and artificial intelligence solutions. Robots must account for most of their revenue for businesses to be eligible for the ETF.

When researching robotics stocks and ETFs to invest in, there are four distinct groups to consider:

  • Companies involved in key automation and robotics technologies
  • Companies that manufacture technologies and components that work with or in robotics
  • Industrial software companies are an integral part of the small automation revolution and the segment likely to have the highest growth rate.
  • Companies use robotics and intelligent automation to expand their product offerings to existing customers. It is an intriguing group that may go unnoticed by many investors.

Invest in robotics for the long term

It is becoming clear that the structural factors behind robotics companies are decisive. The combination of rising labor costs in emerging markets, the growing adoption of IIoT in manufacturing, and the relatively low concentration of robots used in China all point to significant growth for companies operating in emerging markets. Meanwhile, the need to increase productivity in developed markets, especially in light of slowing GDP growth, will drive investment in robotics and automation. Nevertheless, investors in the industry must be able to withstand the ups and downs of the business cycle, mainly because capital expenditures reflect expansion efforts rather than simply supporting the business in question. Investors should also remember that two industries, automotive and electronics/electronics, continue to dominate the near-term outlook for the industry. The underlying long-term growth driving the industry makes it a good haven for long-term investors.

How to buy stocks directly from the company

There's no shortage of robot stocks to choose from. Here are some of the best inventories of robotics companies to look at:

iRobot- iRobot is a consumer robot company that designs and manufactures robots. Its portfolio includes mapping, navigation, mobility, and artificial intelligence concepts. It is also known for creating the Roomba robot vacuum cleaner and, more recently, the Braava floor cleaner.

PTC (NASDAQ: PTC): This robotics company stands out when developing software that ensures accuracy and collaboration in robot design. In fiscal year 1.46, the company earned $202 billion, up 16 percent from a year earlier. Some manufacturers are now moving toward digitization and innovative enterprises, which means PTC will have more opportunities to grow as a business.

Raytheon: This robotics company helps the defense forces by offering autonomous aircraft to look up into the sky, including drones. The company expects 6% to 8% growth.

Boston Dynamics: This robotics company creates human-animal-like robots that do everything from carrying heavy loads in factories to conducting surveillance for the military.

Stryker Corporation: This is one of the largest biotech companies in the U.S., which makes robotic arms used in surgical machines. It uses three-dimensional modeling of bone anatomy.

AeroVironment Inc.: AeroVironment is a developer of unmanned aircraft systems for the Pentagon and dozens of other allied nations. AeroVironment's six unmanned robots can be launched manually for reconnaissance missions or from an aircraft carrier to defend U.S. territories and ships.

Direct Stock Purchase Plan (DSPP)

It's one of the easiest ways to purchase stock in a firm without using a broker. Not all companies run a DSPP, but if the program works, an investor can buy shares directly from the issuer, a medium- and long-term investment method.

The scheme works like this:

The company announces the DSPP by posting the relevant information in the Investor Relations section. A private person must open a particular account to buy shares without a broker. From it, money will be sent to the company, and in return, it provides a certain amount of securities. There may be a format with monthly auto-filling of the account and purchase of a certain number of securities.

In DSPP, there may be no commissions at all, and the entrance threshold is shallow - at the level of $100-$500. These programs were top-rated in the past when brokers were not yet so widespread and made rather strict requirements for the starting capital of investors. The popularity of DSPPs has declined somewhat now, but the programs are still available, and investors actively use them.

Transfer agents, a separate entity whose job is to register transactions, issue/cancel certificates, and process investors' applications, are involved in closing deals. These institutions work in tandem with registrars; when an investor buys shares through them, he receives an electronic certificate certifying his possession of a certain amount of securities.

The most significant advantage of DSPPs for individual investors is the ability to avoid commissions without going to brokers. For some, investing in a DSPP is still a good option. For the small investor willing to buy individual shares of a particular company to add to their portfolio and hold them over the long term, a direct stock purchase plan may be an economical way to do so.