We recently published a list of 12 Best Automation Stocks To Buy According to Hedge Funds. In this article, we are going to take a look at where Intuitive Surgical, Inc. (NASDAQ:ISRG) stands against other best automation stocks to buy according to hedge funds.
The rise of generative AI has skyrocketed automation, while robotics are disrupting industrial automation. On the other hand, supply chain automation has reshaped traditional operations from removing warehousing bottlenecks to inventory management, and demand forecasting. In inventory tracking, advanced warehouse management networks, powered by AI and ML algorithms, assist in optimizing inventory placement, resource allocation, route planning, and more.
Robotics a Key Segment to Automation
Professional service robot sales soared by 30% in 2023, according to the International Federation of Robotics (IFR). IFR’s statistics department data shows that over 205,000 robotics units were sold in 2023, with Asia-Pacific accounting for 80% of global robotics sales. Transportation and logistics service robots sales accounted for 113,000 units in 2023, a rise of 35% from 2022. In addition to that, Medical robots are in huge demand, and medical robot sales soared by 36% to nearly 6,100 units in 2023.
Apart from robotics, quantum computing is revolutionizing various industries. Other technologies including virtual reality (VR), augmented reality (AR), big data, data analytics, and 5G technology are key to driving automation across various segments.
Global X Robotics & Artificial Intelligence ETF (NASDAQ:BOTZ) and Robo Global Robotics and Automation Index ETF (NYSE:ROBO) have surged more than 11% and 8.50% over the last year, respectively. Considering the growing demand for automation systems and robotics, automation stocks hold much promise.
Our Methodology
We used automation and robotics ETFs along with online rankings to shortlist an initial list of automation stocks. We then selected the 12 automation stocks that were the most widely held by hedge funds. The list is sorted in ascending order of the number of hedge fund holders, as of Q3 2024.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A medical team performing minimally invasive surgery with a da Vinci Surgical System.
Intuitive Surgical, Inc. (NASDAQ:ISRG)
No. of Hedge Fund Holders: 82
Intuitive Surgical, Inc. (NASDAQ:ISRG) designs and builds cutting-edge robotic-assisted surgical systems. The company uses AI to enhance its robotic systems and assist surgeons to carry out minimally invasive surgeries with higher precision. The company has a strong competitive moat, supported by its da Vinci Surgical System.
On January 24, JPMorgan analyst Robbie Marcus raised the price target on ISRG shares from $575 to $675, keeping an Overweight rating on the shares. The analyst expects the company to continue its strong momentum with the da Vinci 5 Surgical System in 2025. The company’s improved profitability makes it a strong candidate among the few major players in the industry.
With other medical device companies, such as Abbott, ending 2024 on a flat side, Intuitive Surgical, Inc. (NASDAQ:ISRG) shares closed the year 52.6% higher. Baron Health Care Fund stated the following regarding Intuitive Surgical, Inc. (NASDAQ:ISRG) in its Q2 2024 investor letter:
“Intuitive Surgical, Inc. (NASDAQ:ISRG) manufactures the da Vinci Surgical System, a robotic surgical system used for minimally invasive procedures. The stock performed well due to excitement about the company’s new robotic surgical system, the da Vinci 5, which offers enhanced imaging, force feedback, and other improvements. We continue to believe Intuitive has durable competitive advantages and will remain the market leader in robotic surgery. We think the company has a long runway for growth as more procedures are performed with the company’s equipment.”
Overall, ISRG ranks 2nd on our list of best automation stocks to buy according to hedge funds. While we acknowledge the potential of ISRG to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ISRG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.