12 Best Automation Stocks To Buy According to Hedge Funds

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5. Teradyne, Inc. (NASDAQ:TER)

No. of Hedge Fund Holders: 43

Teradyne, Inc. (NASDAQ:TER) is a renowned supplier of automated test equipment and robotics solutions internationally. The company operates through four segments: Semiconductor Test, System Test, Wireless Test, and Robotics. The company’s robotics segment manufactures robotic arms, autonomous mobile robots, and advanced robotic control software.

The company’s autonomous mobile robot arm MiR is working in partnership with its Danish partner collaborative robot firm Universal Robots. In addition to that, the company also has a collaboration with NVIDIA to assist it with new AI capabilities for automation applications. Teradyne, Inc.’s MiR1200 Pallet Jack is a breakthrough product that runs on NVIDIA-powered AI. During Q4 2024, the company formed a strategic partnership with Infineon, Germany’s leading semiconductor manufacturer, to support its goal in the power semiconductor space, strengthening its position in the automotive and renewables market.

However, the company’s robotics business did not end up according to the expectations due to weak demand. On February 3, Baird reduced the price target on TER shares from $150 to $140, maintaining an Outperform rating on the stock. The drop in price target comes after mixed fourth-quarter 2024 results, mainly due to the weakness in the robotics segment.

Despite the robotics segment delivering lower-than-expected, Teradyne, Inc. (NASDAQ:TER) successfully diversified its customer base. The company has reduced its reliance on the mobile market after achieving a 50% market share in computing VIPs.

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