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 UiPath Inc. (NYSE:PATH) 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 symbolic representation of innovation, with a programmer working on a laptop in front of robotic arms and low code development environment.
UiPath Inc. (NYSE:PATH)
No. of Hedge Fund Holders: 34
UiPath Inc. (NYSE:PATH) is a leading robotics process automation (RPA) firm that offers software bots. The company assists businesses handle virtual tasks and acts as a virtual assistant to the human workforce. The company is a leader in its category with the latest innovation and agentic automation, combining AI agents, robots, and humans to work together to complete tasks.
The company is in a strong position to benefit from the rising demand for agentic AI needed to manage complex business workflows. On January 27, UiPath Inc. (NYSE:PATH) revealed findings from a new study that highlighted that 90% of IT executives have business operations that would require agentic AI. With AI agents becoming increasingly popular in workflow, the company already has a solution. The UiPath Platform is designed to accelerate the shift towards a new era of agentic automation. The company is focusing on data use and AI-powered customer engagement solutions, which will potentially drive new revenue opportunities and platform use cases.
During Q3 FY2024, UiPath Inc. (NYSE:PATH) showed robust performance with an annualized renewal run rate (ARR) of almost $1.61 billion, indicating a 17% rise from a year ago.
Overall, PATH ranks 11th on our list of best automation stocks to buy according to hedge funds. While we acknowledge the potential of PATH 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 PATH 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.