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Investing in robotics stocks

Its applications are far reaching but company valuations tend to be high.

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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:

  1. Core automation and production. Focused on the development and construction of robots and automated processes.
  2. Robot technology. Specialize in specific segments of the robot market, like vision systems, sensors and video compression.
  3. Industrial software. Develop industrial software solutions that enable automated robotic processes.
  4. Robotic integration. Use robotics to enhance their product offerings, like domestic appliances, farming equipment and aircraft systems.

Why invest in robotics stocks?

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 Global Industrial Robotics Market Analysis 2020. And 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 two 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.

Robotics stocks

The robotics industry is growing in the US and internationally. Investors can select from stocks traded directly on US exchanges or purchase over-the-counter shares from international companies.

Robotics stocks on US exchanges

Select a company to learn more about what they do and how their stock performs, including market capitalization, the price-to-earnings (P/E) ratio, price/earnings-to-growth (PEG) ratio and dividend yield. While this list includes a selection of the most well-known and popular stocks, it doesn't include every stock available.

International robotics stocks

To purchase these stocks, you’ll need an international share trading account. Because a lot of beginner-friendly brokerages, like Robinhood and Chase You Invest don’t offer access to international exchanges, this can limit your account options.

  • Daifuku (OTC: DFKCY)
  • Fanuc (OTC: FANU.Y)
  • KION Group (OTC: KIGR.Y)
  • Kuka (OTC: KUKA.F)
  • Siemens (OTC: SIEG.Y)
  • Yaskawa (OTC: YASK.Y)

What ETFs track the robotics category?

Most ETFs that track robotics companies also have an eye on the artificial intelligence industry.

  • Direxion Robotics, Artificial Intelligence & Automation Index Bull 3X Shares (UBOT)
  • First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT)
  • Global X Robotics & Artificial Intelligence Thematic ETF (BOTZ)
  • iShares Robotics and Artificial Intelligence ETF (IRBO)
  • ROBO Global Robotics and Automation Index ETF (ROBO)

Compare trading platforms

To invest, you’ll need a brokerage account. Explore your options below.

Name Product Stock trade fee Asset types Option trade fee Annual fee
Vanguard
$0
Stocks, Mutual funds, ETFs, Forex
$1
$20 per year
Get a personal advisor when you open an account with at least $50,000.
Sofi Invest
$0
Stocks, ETFs, Cryptocurrency
N/A
0%
A free way to invest in stocks, ETFs and crypto.
Robinhood
$0
Stocks, Options, ETFs, Cryptocurrency
$0
0%
Make unlimited commission-free trades in stocks, funds, and options with Robinhood Financial.
Interactive Brokers
$0
Stocks, Bonds, Options, Mutual funds, Index funds, ETFs, Futures, Cash
$0 + $0.65/contract, $1 minimum
0%
IBKR Lite offers $0 commissions, and IBKR Pro offers advanced tools for professional traders.
TD Ameritrade
$0
or $25 broker-assisted
Stocks
$0 + $0.65/contract,
or $25 broker-assisted
TD Ameritrade features $0 commission for online stock, but watch out for high short-term ETF and broker-assisted trading fees.
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Compare up to 4 providers

Disclaimer: The value of any investment can go up or down depending on news, trends and market conditions. We are not investment advisers, so do your own due diligence to understand the risks before you invest.

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.

Review your platform options with multiple providers before you open an account.

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