Robots automate the world around us and enjoy an impressively diverse range of uses. But is the industry worth your money? Robotics may be on the rise, but high rates of competition may threaten your investment.
What is robotics?
Robotics is the study, design and construction of robots. The field is closely related to many engineering disciplines, including computer science, artificial intelligence and bioengineering.
There are many types of robots, including drones, telepresence devices, self-driving cars, household appliances, toys, industrial machines and so many more. As the field of robotics continues to expand, the more likely we are to encounter robots in our daily lives.
Robotics stocks come from companies involved in the conception or construction of robots. Broadly speaking, they include:
Core automation and production. Focused on the development and construction of robots and automated processes.
Robot technology. Specialize in specific segments of the robot market, like vision systems, sensors and video compression.
Robotic integration. Use robotics to enhance their product offerings, like domestic appliances, farming equipment and aircraft systems.
How to invest in robotics
There are several ways you can invest in robotics stocks. You can buy shares of individual robotics stocks. You can also purchase shares of an ETF that invests in several stocks. Here’s how to start:
Choose a stock trading platform. You have plenty to choose from, so be sure to compare your options to find the one that works best for you.
Open your account. Be ready with your ID, Social Insurance Number (SIN) and bank account information.
Fund your account. You’ll need to transfer money to your brokerage account before you can start investing. Some platforms let you start with as little as $1.
Search for stocks. Look up stocks by ticker symbol or use a stock screener to filter the types you’re interested in.
Place an order. Once you’ve found an investment you want, specify how much of it you wish to purchase and submit your order.
Monitor your investments. Track the performance of your portfolio by logging on to your account.
Our selection of top picks is based on the same criteria as our annual Stock Trading Platform Awards. This is updated yearly to reflect changes in the market.
"Best for" picks are those we've evaluated to be best for specific product features or categories – you can read our full methodology here. If we show a "Promoted" pick, it's been chosen from among our commercial partners and is based on factors that include special features or offers, and the commission we receive.
This isn't an exhaustive list of all the trading platforms out there. What's best for you depends on your own investing strategy, budget and financial goals.
Robotics stocks
The robotics industry is growing in Canada, the US and internationally. Investors can select from stocks traded directly on Canadian and US exchanges or purchase over-the-counter shares from international companies.
There are a number of user-friendly platforms like Wealthsimple and Scotia iTRADE that provide access to both Canadian and US stocks. However, you may need a more advanced trading platform like Interactive Brokers to access OTC Markets and stock exchanges in other countries.
It’s hard to argue against the excitement of investing in the tech sector. And the robotics industry in particular presents an enticing opportunity for investors.
There’s a lot of long-term growth potential in robotics. Like artificial intelligence, the robotics industry is on an impressive growth trajectory.
From 2018 to 2026, the robotics industry is expected to grow by about 11% per year, according to the 2020 Global Industrial Robotics Market Analysis. The sweeping practical applications of this technology seem endless including uses in healthcare, industrial assembly, military, automotive, consumer goods.
Robotics stocks also offer investors the opportunity to back a technology they may actually benefit from like surgical robots, disaster-response robots or farming robots.
Risks of investing in robotics
There are 2 risks to consider before you invest in robotics stocks: competition and company valuations.
Market sectors poised for growth hold plenty of investment potential but tend to experience higher rates of competition. And competition can be cutthroat — especially for newly hatched startups that lack the capital and resources of better-established companies.
And the other major risk factor associated with robotics stocks plays into the first: high company valuations. It’s no secret that the robotics industry is on an upward trajectory, and the market has adjusted in response. Like many other industries in this sector, robotics stocks can get expensive, and that’s a result of the higher valuations associated with companies in this industry.
The bottom line? Investors risk pouring funds into an expensive stock only to watch the company flounder amid competition.
Compare trading platforms
To invest, you’ll need a brokerage account. Explore your options below.
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Bottom line
The field of robotics is growing and there are many ways to apply the technology. But the price of investing in robotics may be higher than investors are willing to risk on such a competitive industry.
Yes, some robotics stocks pay dividends, including ABB, Deere, Kuka and Rockwell Automation.
To purchase over-the-counter stocks, you’ll need a brokerage account that offers access to OTC markets, like Interactive Brokers.
Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.
Shannon Terrell is a lead writer and spokesperson at NerdWallet and a former editor at Finder, specializing in personal finance. Her writing and analysis on investing and banking has been featured in Bloomberg, Global News, Yahoo Finance, GoBankingRates and Black Enterprise. She holds a bachelor’s degree in communications and English literature from the University of Toronto Mississauga.
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