Below we present the list of 5 Robotics Stocks That Will Own the Future. For our methodology and a more comprehensive list, please see 10 Robotics Stocks That Will Own the Future.
5. Ambarella, Inc. (NASDAQ:AMBA)
Number of Hedge Fund Shareholders: 28
After gaining 121% last year, Ambarella, Inc. (NASDAQ:AMBA) shares have given back all of those gains and more in 2022, falling by 69%. The fabless semiconductor design company, which makes computer vision processors that outfit cameras with advanced analytical capabilities, has seen its growth stall this year.
Sales growth slowed to just 2% in Q2, down from 29% a year earlier, though some of that was certainly due to supply chain issues rather than lack of demand. Things are expected to get even worse before they get better, as the company’s sales are expected to decline year-over-year in Q3; not a good look for a growth company, regardless of extenuating circumstances.
Hedge fund ownership of Ambarella, Inc. (NASDAQ:AMBA) has dipped by 30% over the past two quarters after peaking at the end of 2021. On the other hand, Steve Cohen’s Point72 Asset Management is more bullish than ever, growing its AMBA position by 1,102% during Q2 to 655,043 shares valued at $42.9 million.
The Carillon Scout Small Cap Fund noted that supply chain issues have impeded the strong demand for Ambarella, Inc. (NASDAQ:AMBA)’s products, as revealed in the fund’s Q1 2022 investor letter:
“Ambarella (NASDAQ:AMBA) supplies video processing and computer vision chips used in the security and automotive markets. The company continues to face supply headwinds from its foundry partner despite robust market demand for Ambarella’s products.”
4. Teradyne, Inc. (NASDAQ:TER)
Number of Hedge Fund Shareholders: 31
Teradyne, Inc. (NASDAQ:TER) develops automation equipment for the industrial sector, serving aerospace, semiconductor, and automotive companies, among others. Teradyne shares are down by 51% this year and the company’s Q3 and Q4 guidance came in well below expectations. However, the company should be poised to benefit from increased 3nm test demand next year given Apple Inc. (NASDAQ:AAPL)’s reported plans to shift some of the production from its iPhone 14 into the Pro model next year.
Teradyne, Inc. (NASDAQ:TER) is yet another robotics stock that hedge funds have been selling off in recent quarters, as there’s been a 35% decline in the number of money managers long TER. Josh Resnick’s Jericho Capital Asset Management and Mika Toikka’s AlphaCrest Capital Management sold off their Teradyne holdings during Q2.
The Carillon Scout Mid Cap Fund discussed Teradyne, Inc. (NASDAQ:TER)’s slumping revenue guidance in its Q1 2022 investor letter:
“Semiconductor test equipment and industrial robot producer Teradyne (NASDAQ:TER) fell after offering lower than expected revenue guidance due to fewer orders from its largest customer. Semiconductor equipment companies as a group underperformed as investors feared a general slowdown in semiconductor demand if the global economy slows.”
3. AMETEK, Inc. (NYSE:AME)
Number of Hedge Fund Shareholders: 40
AMETEK, Inc. (NYSE:AME) supplies automation tools and analytical instrumentation to companies in the industrial, medical, and aerospace industries, among others. The company delivered strong Q2 results, pulling in $1.51 billion in revenue and $1.38 in adjusted EPS, both of which handily topped estimates. The company subsequently raised its full-year earnings guidance, citing strong organic growth and broad-based demand. It expects earnings to grow by 13% to 14% year-over-year in 2022.
Hedge fund ownership of AMETEK, Inc. (NYSE:AME) ticked up during Q2 and has risen by 29% since March 2021. Israel Englander’s Millennium Management, Dmitry Balyasny’s Balyasny Asset Management, and Ken Griffin’s Citadel Investment Group all own more than 1 million shares of AME as of June 30.
The ClearBridge Mid Cap Strategy likes AMETEK, Inc. (NYSE:AME)’s long-term prospects, but decided to sell off its holding last year to reinvest in a more promising alternative, as revealed in the fund’s Q3 2021 investor letter:
“We sold AMETEK, in the industrials sector, and used the proceeds to add RBC Bearings, which manufactures precision engineered bearings and components for highly technical machines, such as aircrafts, submarines and power transmission systems. AMETEK is a company we have held for many years, and we continued to like their long-term prospects, but believe better upside was available in RBC Bearings due to a temporary stock price dislocation created by an equity offering for a highly accretive acquisition.”
2. Emerson Electric Co. (NYSE:EMR)
Number of Hedge Fund Shareholders: 48
Emerson Electric Co. (NYSE:EMR) has two main segments, one devoted to automation, the other being a supplier of heating and ventilation systems, as well as related parts, to the home building industry. However, the company is reportedly in discussions with Blackstone Inc. (NYSE:BX) to sell at least some of the latter business to the investment management company, which would make Emerson more of an automation pure play.
Emerson Electric Co. (NYSE:EMR) grew adjusted earnings by 21% to $1.29 per share in Q2, while net sales were up by 8% to $4.8 billion. Trailing three-month underlying orders grew by 13%, including by 17% in its automation business. The company raised its full-year outlook following the results. Emerson Electric is also one of the rare dividend kings in this space, having raised its dividend for 65 consecutive years. EMR shares currently yield 2.63%.
There’s been a net influx of hedge funds into Emerson Electric Co. (NYSE:EMR) over each of the past three quarters, with overall ownership of the company rising by 17% during that time. Paul Tudor Jones’ Tudor Investment Corp and Jinghua Yan’s TwinBeech Capital initiated new positions in EMR during the second quarter.
1. Intuitive Surgical, Inc. (NASDAQ:ISRG)
Number of Hedge Fund Shareholders: 57
Intuitive Surgical, Inc. (NASDAQ:ISRG), creator of the da Vinci robotic surgery assistant, tops the list. The company’s robots assist surgeons in performing delicate and precise procedures, and the results from its usage are tremendous, with better patient outcomes and reduced recovery times.
Intuitive Surgical has been growing at a fast pace for the past two decades and has an extended runway ahead of it, as just 3% of surgeries currently use robotic assistance. Furthermore, the company continues to expand its device’s capabilities with new hardware components and functionality, which should continue to expand its addressable market.
Intuitive Surgical, Inc. (NASDAQ:ISRG) remains the most popular robotics stock among hedge funds despite a 12% dip in the number of money managers long ISRG during Q2. Prior to that, ownership of Intuitive Surgical had risen for five straight quarters. Ken Fisher’s Fisher Asset Management owns 4.6 million ISRG shares as of June 30, valued at over $923 million at that time.
The Baron Health Care Fund noted some of the reasons why Intuitive Surgical, Inc. (NASDAQ:ISRG) shares declined this year, but likes the company’s long-term outlook, as detailed in the fund’s Q2 2022 investor letter:
“Intuitive Surgical, Inc. markets the da Vinci Surgical System, a robotic system used for minimally invasive surgical procedures. The stock declined along with other premium valuation, high-growth names due to investor concerns around inflation and rising interest rates. The potential for a more challenging sales environment for Intuitive’s hospital customer base also played a role. We continue to believe Intuitive has a long runway to expand the number of procedures performed using its robotic system.”
For more of the latest stock picks worth considering for your portfolio, check out the Best Delivery Stocks To Buy and the Best Diabetes Stocks To Buy.
Disclosure: None.
