5 Best Automation Stocks To Buy Now

In this article, we discuss 5 best automation stocks to buy now. If you want to see more stocks in this selection, check out 12 Best Automation Stocks To Buy Now. 

5. Emerson Electric Co. (NYSE:EMR)

Number of Hedge Fund Holders: 48

Emerson Electric Co. (NYSE:EMR) is a technology and engineering company that offers solutions for customers in industrial, commercial, and consumer markets in the Americas, Asia, the Middle East, Africa, and Europe. The company operates through Automation Solutions, AspenTech, and Commercial & Residential Solutions segments. On November 2, Emerson Electric Co. (NYSE:EMR) declared a $0.52 per share quarterly dividend, a 1% increase from its prior dividend of $0.515. The dividend was paid to shareholders on December 9. 

On November 30, RBC Capital analyst Deane Dray raised the price target on Emerson Electric Co. (NYSE:EMR) to $110 from $102 and maintained an Outperform rating on the shares. The analyst cited the company’s presentation at the annual analyst meeting, highlighting its roadmap as the new automation pure-play. The analyst added that given how Emerson Electric Co. (NYSE:EMR) is expected to exit FY23 on a net-cash basis, investors will be “riveted” by the company’s capital deployment impact on organic growth, M&A, buybacks, and the 66 years of dividend hikes.

According to Insider Monkey’s Q3 data, 48 hedge funds were bullish on Emerson Electric Co. (NYSE:EMR), compared to 47 funds in the prior quarter. D E Shaw is the largest stakeholder of the company, with nearly 2 million shares worth $145 million. 

4. Honeywell International Inc. (NASDAQ:HON)

Number of Hedge Fund Holders: 53

Honeywell International Inc. (NASDAQ:HON) is a North Carolina-based diversified technology and manufacturing company. It operates through Aerospace, Honeywell Building Technologies, Performance Materials and Technologies, and Safety and Productivity Solutions segments. Its Performance Materials and Technologies segment offers automation control, instrumentation, software, and related services. It is one of the best automation stocks to invest in. 

On December 9, Citi analyst Andrew Kaplowitz raised the price target on Honeywell International Inc. (NASDAQ:HON) to $248 from $213 and maintained a Buy rating on the shares. The analyst noted that improving price versus cost trends and gradually advancing supply chains should remain supportive of higher profitability for most of the industrial sector. 

According to Insider Monkey’s data, Honeywell International Inc. (NASDAQ:HON) was part of 53 hedge fund portfolios at the end of September 2022, compared to 42 in the prior quarter. Ric Dillon’s Diamond Hill Capital is a prominent stakeholder of the company, with 1.14 million shares worth $190.2 million. 

Here is what ClearBridge Investments has to say about Honeywell International Inc. (NASDAQ:HON) in its Q1 2021 investor letter:

“The portfolio’s quality bias and valuation discipline have generated compelling returns over time with typically strong relative results in more challenging environments as it did through the first three quarters of 2020. However, that same quality bias tends to create a more challenging relative performance environment for the Strategy during periods of sharp economic acceleration, which tend to benefit stocks that are more commodity linked or of lower quality. This has been the case during the vaccine- and stimulus-driven rally experienced late last year and during the most recent quarter. Sectors that lagged in the quarter included industrials, Honeywell also lagged in the quarter after previously generating strong returns over extended periods.”

3. Applied Materials, Inc. (NASDAQ:AMAT)

Number of Hedge Fund Holders: 67

Applied Materials, Inc. (NASDAQ:AMAT) is a California-based company that engages in the provision of manufacturing equipment, services, and software to the semiconductor, display, and related industries. It operates through three segments – Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets. The company provides factory automation software for semiconductors and discrete manufacturing. 

On December 7, Loop Capital analyst Scott Graham initiated coverage of Applied Materials, Inc. (NASDAQ:AMAT) with a Buy rating and a $125 price target. The company’s Semiconductor sales should outperform the overall WFE capex, both during the present downturn and when capex turns positive again in Q3 of FY24, the analyst told investors in a research note. 

According to Insider Monkey’s Q3 data, Applied Materials, Inc. (NASDAQ:AMAT) was part of 67 hedge fund portfolios, with collective stakes worth $3.8 billion. David Blood and Al Gore’s Generation Investment Management is the largest position holder in the company, with 6.70 million shares valued at $549 million. 

2. Intuitive Surgical, Inc. (NASDAQ:ISRG)

Number of Hedge Fund Holders: 69

Intuitive Surgical, Inc. (NASDAQ:ISRG) is a California-based company that develops, manufactures, and markets products enabling physicians and healthcare providers to improve the quality of and access to minimally invasive care in the United States and internationally. The company’s systems allow surgeons to perform delicate and complex operations through a few small incisions with robotic assisted surgery. It is one of the best automation stocks to invest in. Intuitive Surgical, Inc. (NASDAQ:ISRG) grew its Da Vinci Surgical System installed base to 7,364 systems as of September 30, 2022, an increase of 13% compared to 6,525 as of the end of the third quarter of 2021.

On December 5, BTIG analyst Ryan Zimmerman raised the price target on Intuitive Surgical, Inc. (NASDAQ:ISRG) to $316 from $247 and maintained a Buy rating on the shares as part of a broader research note on Medical Technology. 2023 is set to be an improved year for the industry following the underperformance in 2022 due to high oil prices, a constrained supply chain, currency headwinds, inflation, and labor shortages, the analyst told investors.

According to Insider Monkey’s data, 69 hedge funds were bullish on Intuitive Surgical, Inc. (NASDAQ:ISRG) at the end of September 2022, compared to 56 funds in the prior quarter. Ken Fisher’s Fisher Asset Management is the leading stakeholder of the company, with 4.2 million shares worth $796 million. 

Here is what Baron Funds specifically said about Intuitive Surgical, Inc. (NASDAQ:ISRG) in its Q3 2022 investor letter:

“We added to our position in Intuitive Surgical, Inc. (NASDAQ:ISRG), a medical device company which sells the da Vinci robotic surgical system. The stock declined during the quarter due to a slowdown in systems sales. Hospitals are cutting capex budgets due to higher inflation, higher interest rates, supply-chain challenges, and staffing shortages. Although there is risk that system sales could remain under pressure in the near term, we think solid procedure volume results can continue. We think the long-term outlook for Intuitive is positive based on our view that the company has a long runway to convert more procedures to robotic procedures. During the quarter, the company announced a $1 billion accelerated share repurchase program, which we view as a positive signal about the valuation and business prospects.”

1. NVIDIA Corporation (NASDAQ:NVDA)

Number of Hedge Fund Holders: 89

NVIDIA Corporation (NASDAQ:NVDA) is a California-based company that specializes in autonomous driving development agreements and autonomous vehicle solutions, in addition to providing graphics and semiconductor solutions. It is one of the best automation stocks to monitor. 

On December 9, Tigress Financial analyst Ivan Feinseth reaffirmed a Buy recommendation on NVIDIA Corporation (NASDAQ:NVDA) but lowered the price target on the shares to $250 from $310, citing a re-rating of valuation. His updated target represents a potential return of more than 55% from present levels, noted the analyst, who sees NVIDIA Corporation (NASDAQ:NVDA)’s “industry-leading” position in Artificial Intelligence and multiple new products and partnerships, allowing it to overcome short-term headwinds and position it for a new business upcycle.

According to Insider Monkey’s third quarter database, 89 hedge funds were bullish on NVIDIA Corporation (NASDAQ:NVDA), compared to 84 funds in the earlier quarter. Philippe Laffont’s Coatue Management is a significant position holder in the company, with 3.3 million shares worth $410.8 million.  

Vulcan Value Partners made the following comment about NVIDIA Corporation (NASDAQ:NVDA) in its Q3 2022 investor letter:

“We also sold NVIDIA Corporation (NASDAQ:NVDA) during the quarter to allocate capital to new purchases and to add to existing positions in the portfolio. NVIDIA is facing multiple headwinds. Data center revenue growth is slowing, gaming revenue growth is declining, and the United States has issued new export controls to China that impact NVDIA’s products. We believe NVDIA’s competitive advantages are intact, and it remains on our MVP list. In the right circumstances we would be delighted to own it in the future.”

You can also take a look at 22 Most Indebted Companies in the World in 2022 and 15 Best Electric Car Stocks To Buy.