3 Automation Stocks Riding Fresh Interest In Robotics And AI Infrastructure

Industrial automation and robotics are back in the spotlight after Uber founder Travis Kalanick raised $1.7b for his new start up Atoms, drawing heavyweight investors such as Andreessen Horowitz, Goldman Sachs, JPMorgan, and Uber itself into the sector. For investors, that kind of capital and attention can reshape expectations around companies already working on automation, AI and autonomous systems, from mining and construction to food production. This article looks at 3 stocks from our Industrial Automation and Robotics screener that appear closely exposed to these headlines, and explores why some investors might lean in or stay cautious.

Ouster (OUST)

Overview: Ouster is a San Francisco based lidar specialist that sells digital sensor kits and software used to give robots, vehicles and smart infrastructure a 3D view of the world, serving automotive, industrial, robotics and traffic systems customers across the Americas, Asia Pacific, Europe, the Middle East and Africa.

Operations: Ouster currently generates about US$185.3 million in revenue from the sale of lidar sensor kits.

Market Cap: US$2.7b

Some investors looking at the surge in industrial automation interest from Atoms and others may view Ouster as one of the picks and shovels suppliers to that trend, with lidar sensors already used in autonomous trucks, mining vehicles, ports and smart traffic systems. The company is still loss making and relies on external funding, with recent equity raises increasing dilution risk. Partnerships across heavy machinery, ports and intelligent transport, plus a growing software layer on top of the hardware, give Ouster exposure to several automation niches that many investors are only starting to pay attention to.

Ouster is fast becoming a core supplier for robots, trucks and smart cities, but the key question is how its funding needs and loss making profile fit together. Get the 3 key rewards and 3 important warning signs (1 is major!)

Novanta (NOVT)

Overview: Novanta is a Bedford, Massachusetts based company that supplies high precision components like lasers, motion control systems, sensors and medical devices that sit inside industrial robots, factory automation lines and surgical equipment used in hospitals around the world.

Operations: Novanta generates roughly US$508.9 million from Automation Enabling Technologies and US$496.0 million from Medical Solutions, with revenue spread across the United States, Europe and Asia.

Market Cap: US$5.5b

Investors watching Travis Kalanick's Atoms raise may see Novanta as a quieter enabler of the same shift, supplying motion control, sensing and end of arm tooling that shows up in warehouse robots, lab automation and surgical systems rather than in consumer facing apps. Analysts expect earnings growth to outpace revenue, helped by higher margin medical devices and consumables, but the stock already trades on a rich P/E and recent profit margins have softened, partly due to one off items and acquisition spending. With new financing to support the Riverpoint Medical acquisition and ongoing buybacks, the key debate is whether Novanta's mix of automation and healthcare exposure justifies the premium investors are paying.

Novanta’s mix of automation hardware and medical exposure has investors debating whether the rich P/E tells the whole story. It is worth seeing what the 1 key reward and 1 important warning sign quietly reveals about where expectations could be stretched or still conservative.

Cognex (CGNX)

Overview: Cognex is a US based specialist in machine vision, supplying cameras, sensors, software and AI platforms that help factories and warehouses identify, inspect and track items like auto parts, smartphones and e commerce parcels without human intervention.

Operations: Cognex generates about US$1.0b in revenue from Machine Vision Technology.

Market Cap: US$10.5b

Cognex gives you direct exposure to the brain of industrial automation, supplying AI powered vision systems that help robots and high speed logistics lines see, identify and route products as capital keeps flowing into projects like Travis Kalanick’s Atoms. Analysts are building in strong earnings growth and recent Q1 results and guidance came in ahead of expectations, but a very high P/E and rich analyst price targets mean a lot of optimism is already reflected in the stock. Add in significant insider selling, a relatively new management team and funding that leans on external borrowing, and the key question is whether Cognex’s AI vision roadmap and diversified end markets offer enough quality and resilience to justify that premium.

Cognex sits at the crossroads of AI, premium expectations and insider selling, yet many investors may be missing how those pieces fit together. The full 3 key rewards and 1 important warning sign

The three stocks in this article are only a starting point, and the full Industrial Automation and Robotics screener surfaces 18 more companies with equally compelling automation and robotics narratives that many investors are not yet watching closely. Use Simply Wall St to identify and analyze the specific catalysts, funding profiles and business narratives that matter to you, so you can focus on the highest conviction industrial automation and robotics ideas across the list.

Take Control of Your Investment Journey

If Ouster or any of these companies sound like a great opportunity, register for FREE with Simply Wall St and add your companies to a Watchlist to monitor the share price against the fair value the ideal entry point. Once you've made your move, manage your holdings with our Portfolio Command Center that filters out the noise to deliver only the most critical, actionable updates. Throughout your journey, our Community allows you to filter the best ideas from thousands of investor perspectives. By uncovering hidden catalysts and risks early, you'll accelerate your decision-making and stay one step ahead of the market.

Seeking Fresh Alternatives Before They Fly?

New themes are breaking out while attention stays locked on the usual tickers. The sharpest moves often happen under the radar for now, so consider researching them early.

• Explore fast-moving high yield opportunities before they get crowded by checking out hand picked income plays inside the 7 dividend fortresses.
• Track where AI momentum is building quietly, using a curated short list of profitable leaders through the 63 profitable AI stocks that aren't just burning cash.
• Monitor interest in critical materials by reviewing carefully filtered producers via the 8 top copper producer stocks.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com