We recently compiled a list of the 10 Cheap Robotics Stocks to Invest In Now. In this article, we are going to take a look at where AeroVironment, Inc. (NASDAQ:AVAV) stands against other robotics stocks to buy now.
Global Robotics Market Outlook
The robotics industry, which has grown modestly over the past few years, has suddenly picked up pace after the emergence of AI. According to Goldman Sachs’ Head of China Industrial Technology research, the total addressable market for humanoid robots is expected to reach $38 billion by 2035, an upgrade of sixfold from a previous projection of $6 billion in 2023.
We recently covered 8 Most Promising Robotics Stocks According to Hedge Funds.
According to the International Federation of Robotics (IFR), professional service robots experienced a 30% increase in sales in 2023. IFR’s statistics department noted that more than 205,000 robotics units were sold in 2023, with Asia-Pacific accounting for 80% of global robotics sales. Transportation and logistics service robots were in huge demand and accounted for 113,000 units built in 2023, up by 35% compared to 2022. Medical robots are also in high demand, and the number surged by 36% to almost 6,100 units in 2023. The demand for surgery and diagnostics robots was the highest as they registered growth of 14% and 25% year-over-year.
The US Robotics Market
The United States is home to 199 companies engaged in robotics, with 66% producing professional service robots, 27% consumer service robots, and 12% medical robots. China ranks second after the US with 107 service and medical robot manufacturers and Germany ranks third with 83 companies.
According to IFR, the US manufacturing companies have invested significantly in automation, and the industrial robot installations surged by 12% to 44,303 units in 2023. Whereas, robotics installations in the electrical and electronics industry increased to 5,120 units in 2023, up by 37% year-over-year.
Global X Robotics & Artificial Intelligence ETF (NASDAQ:BOTZ) and Robo Global Robotics and Automation Index ETF (NYSE:ROBO) have returned more than 11% over the last year, respectively. Given the rising demand for humanoids and automation systems, robotics stocks present a promising area for investors to explore.
You can also visit and see the 12 Best Penny Stocks to Invest in According to the Media.
A robotics technician in a clean room programming a CNC series product.
Our Methodology
To determine the list of cheap robotics stocks to invest in, we shortlisted the companies mainly involved in robotics with an analyst upside of more than 25%. Cheap, in the context of this article, means stocks that Wall Street analysts believe are undervalued and will skyrocket to higher share prices. We have ranked the cheap robotics stocks to invest in based on their popularity among hedge funds, as of Q3 2024, in ascending order.
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).
AeroVironment, Inc. (NASDAQ:AVAV)
Analyst Upside (as of January 11): 37.77%
No. of Hedge Fund Holders: 22
AeroVironment, Inc. (NASDAQ:AVAV) is a technology company that designs and develops a range of robotic systems for government agencies and businesses in the US and globally. The company makes uncrewed aircraft and ground robot systems and other systems for the United States Department of Defense (DoD), and other agencies.
Considering the increasing demand for UAVs amidst the Russia-Ukraine war and other global conflicts, AeroVironment Inc. (NASDAQ:AVAV) significantly benefits from the ongoing situation. The DoD’s focus on developing and integrating advanced drone technologies such as jet drones and unmanned combat aircraft, is expected to drive higher demand for AeroVironment’s products.
During the second quarter of fiscal year 2025, AeroVironment Inc. (NASDAQ:AVAV) posted a record Q2 revenue of $188 million. The company’s Loitering Munition Systems segment also achieved record revenue of almost $78 million, a 61% year-over-year increase. The company’s backlog continues to grow due to new orders and stood at $467 million by the end of Q2 FY25. The company is well-positioned to take advantage of growing demand in the sector and secure new military orders.
Overall, AVAV ranks 4th on our list of Cheap Robotics Stocks to Invest in Now. While we acknowledge the potential of AVAV 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 AVAV but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.
