The growth of artificial intelligence is a rising tide that raises all ships. This is evident when looking at one-year growth of companies such as Microsoft (NASDAQ:MSFT), Meta Platforms (NASDAQ:META) and Nvidia (NASDAQ:NVDA), through a historic AI bull run that we are still in. Technology that helps corporations automate and make day-to-day tasks more efficient will be prevalent in the coming years. Just as automated machines took factory workers’ jobs, robots will start to do the same in multiple sectors.
This is backed by the robotics industry’s compound annual growth rate, which projected to be 18% through 2034. This is indicative of strong growth – even in companies that don’t match the industry average.
With that in mind, here are three robotics stocks that will give you favorable returns in the long run.
Tesla (TSLA)
Tesla (NASDAQ:TSLA) is not the first thing that comes to mind when you think robotics stocks. The company is a globally renown EV manufacturer. But Tesla is expanding into the robotics sector through products such as Robotaxi and Optimus (Tesla Bot). However, Tesla’s core EV business is currently struggling, representing a risk investors should factor in.
Tesla’s financials are pretty good; it has a profit margin of 14.3%, an operating cash flow of $10.98 billion, and an EBITDA of $12.26 billion. However, quarterly revenue is down 8.7% from a year ago, with earnings growth down more than 55%. This is primarily due to delivery expectations falling. EV sales in the second quarter are expected to fall as much 12%. However, other sources suggest that this quarter marks the “rebound” with innovations such as Robotaxi carrying the company’s growth.
Robotaxi is Tesla’s spin on the autonomous taxi. CEO Elon Musk has been teasing this for a while, but Robotaxi’s official reveal date has yet to be confirmed. Hinting to its release, the company recently patented a self-cleaning feature for Robotaxi. This shows a step in the right direction. Analysts are projecting this as being a huge catalyst, so it is best to move now and buy TSLA stock.
Intuitive Surgical (ISRG)
Intuitive Surgical (NYSE:ISRG) is a robotics company that specializes in products used in the healthcare sector. It has seen immense growth over the past year and is up 30% in 2024. Strong revenue and earnings growth make this pick a buy.
ISRG currently has a profit margin of 27.1%, with an operating margin of 24.8%. The company has $7.32 billion in revenue over the past 12 months, with quarterly revenue increasing by 11.5% in the last year. Profitability is very strong, with an earnings growth of 53.4% in the same period. The company has $4.8 billion in cash; enabling ISRG to expand its research and development departments.
The company is projecting 16.1% growth over the next five years. This is based on multiple catalysts, including the adoption of its systems and developments in AI, but counterbalanced by supply constraints. The company’s Da Vinci system has grown by 14% from a year ago with utilization up 2%. The increased prevalence of AI in the medical field also boosts ISRG stock. However, supply constraints are leading to ISRG losing sales; any missed sale means that the company misses out on market share. That being said, ISRG is still a solid robotics stocks pick.
Serve Robotics (SERV)
Serve Robotics (NASDAQ:SERV) operates in the autonomous food delivery niche. While it is a newer company, it saw immense publicity over the past few months. SERV is up 1% over the past five days, but is down 92% year-to-date. While this seems to be a negative sign, analysts are projecting an average price target of $46.33, representing a growth potential of over 2,200%.
The company’s financials aren’t great; the operating margin is a loss of 814.55%, EBITDA is a loss of $21.33 million, and operating cash flow is loss of $16.34 million. This led to the company losing a lot of money – debt stands at $8.47 million. However, a saving grace is that quarterly revenue is up 2,252%, which is extremely impressive for a company this small.
A leading growth catalyst for SERV is its partnership with industry heavyweights – this includes Uber (NYSE:UBER), Nvidia, and 7-Eleven. These partnerships have become increasingly useful as they provide SERV with legitimacy and leverage. Recently, SERV announced that it would be expanding operations in Los Angeles, with Uber Eats helping SERV cover areas of Koreatown.
Insiders and institutions control 44.2% of SERV stock, which should make investors confident. This suggests that people believe this company has a ways to go. Thus, it is a great low-cost robotics stock investment.
On the date of publication, Matthew Rodrigues did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor held a LONG position in NVDA.