We recently published a list of the 10 Best Robotics Stocks to Buy According to Billionaires. In this article, we are going to take a look at where Rockwell Automation, Inc. (NYSE:ROK) stands against the other robotics stocks held by billionaires.
Robotics Market Outlook
The robotics industry has grown modestly over the past few years. Robotic companies are growing faster than ever, driven by advancements in technology since the emergence of AI. Especially, humanoid robots are rapidly growing in the global market, driven by AI. According to Goldman Sachs’ research, the total addressable market for humanoid robots is projected to cross $38 billion by 2035, a massive upgrade from its previous forecast of $6 billion in 2023.
READ ALSO: 10 Cheap Robotics Stocks To Invest In Now
Morgan Stanley expects the humanoid robot units to reach 40,000 by 2030 and cross 63 million by 2050. Citigroup is even more bullish, anticipating a $7 trillion humanoid robot market by 2050, with 1.19 billion humanoid robots in operation. Adam Jonas from Morgan Stanley expects humanoid robots to be a multi-decade, trillion-dollar opportunity as the adoption could accelerate faster for autonomous vehicles.
In 2023, the new World Robotics report noted around 4.28 million units operating in factories globally, growing by 10% compared to 2022. Annual installations surpassed half a million units for the third consecutive year. Asia remains the hot region for robots, with 70% of all newly deployed robots in 2023 installed in Asia. China, Japan, South Korea, and India are some of the largest robotics markets in the world. China leads the market, recording 276,288 industrial robots installed in 2023, representing 51% of the global installations. The U.S. has the largest robotics market in the region, accounting for 68% of installations in the Americas in 2023.
The U.S. stock market has been under pressure due to tariffs as the broader market has plunged over 4.50% year-to-date. At the same time, Global X Robotics & Artificial Intelligence ETF (BOTZ) and Robo Global Robotics and Automation Index ETF (ROBO), which returned over 11% in 2024, have dropped nearly 10% and 7% year-to-date, respectively. Despite the market facing political headwinds, robotics stocks hold great promise, considering the rising demand for humanoids and automation systems.
Logistics robots filling packages in a warehouse, preparing for delivery.
Our Methodology
To compile our list of the best robotics stocks to buy according to billionaires, we looked for the robotics and automation companies widely held by billionaires. Data for the billionaire holders for each stock was taken from Insider Monkey’s database, updated as of Q4 2024. Finally, the 10 best robotics stocks to buy were ranked in ascending order based on the billionaire investors holding stakes in them. We have also mentioned the number of hedge funds holding each stock as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Rockwell Automation, Inc. (NYSE:ROK)
Number of Billionaire Investors: 11
Number of Hedge Fund Holders: 39
Rockwell Automation, Inc. (NYSE:ROK) is engaged in industrial automation and digital transformation. It operates in more than 100 countries across the globe. Allen-Bradley, FactoryTalk software, and LifecycleIQ Services are some of the well-known brands of Rockwell. The company operates in three segments: Intelligent Devices, Software & Control, and Lifecycle Services. Rockwell industrial automation and information solutions are key for setting and integrating robotic systems in manufacturing and other industrial setups. For instance, Rockwell’s programmable logic controllers (PLCs) are important for the accurate and coordinated movement of robotic systems.
On March 26, Julian Mitchell from Barclays lowered ROK’s price target from $285 to $280, maintaining an Equal-Weight on the stock. The analyst retains the rating after dropping the price target twice in March. Mitchell has adjusted targets in the multi-industry group as part of a Q1 preview. The analyst expects revenue and margin pressure alongside lower investor expectations. However, Mitchell underscores a potential correlation between Rockwell’s sales performance and the political environment, especially considering the historical context of the company’s sales boost following the 2016 elections.
Madison Dividend Income Fund stated the following regarding Rockwell Automation, Inc. (NYSE:ROK) in its Q4 2024 investor letter:
“This quarter we want to highlight two new relative yield investments made during the quarter. The Fund purchased Rockwell Automation, Inc. (NYSE:ROK) as a new Industrial holding. ROK is a high-quality global industrial automation equipment and services company. We believe it has a sustainable competitive advantage due to its large installed base of mission-critical automation equipment, high customer switching costs, strong brand reputation, and intangible assets.
ROK experienced a cyclical downturn in orders, revenues, and earnings in 2024 that created an opportunity to purchase stock at an attractive valuation. As shown in the graph below, ROK had a relative dividend yield of 1.4x the S&P 500 at the time of purchase, which was its highest relative yield since the 2008-2009 financial crisis. Company orders appear set to trough throughout 2025 and long-term demand for automation products should grow faster than GDP, driven by favorable secular trends including U.S. reshoring and supply chain de-risking. ROK has an A-rated balance sheet by Standard & Poor’s and has raised its dividend by an average of 5% over the past five years. We expect continued dividend increases going forward.”
Overall ROK ranks 5th on our list of the Robotics stocks to buy according to billionaires. While we acknowledge the potential of ROK as an investment, 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 ROK but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks To Invest In According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
