TER - The 3 Most Undervalued Robotics Stocks to Buy in July 2024
2024-07-13 06:59:00 ET
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We have little doubt that generative AI is in vogue on Wall Street, but this shouldn’t distract investors from the industry’s wider array of opportunities. Robotics leans heavily on artificial intelligence, and the strides being made in the sector will generate plenty of investment opportunities.
Innovative robotics firms can also capitalize on the great growth. The robotics market is forecasted to grow from $39.71 billion in 2023 to $135.68 billion by 2031 , representing a CAGR of 16.60% over this time frame.
The evolution of artificial intelligence will deliver strong opportunities in robotics, with the industry’s more ambitious firms capable of generating pioneering new technology for various industry purposes. This will pave the way for more undervalued stocks to make strides and attract merger and acquisition interest.
With this in mind, let’s take a closer look at the most undervalued robotics stocks to add in July 2024:
UiPath (PATH)
There’s no getting away from it. UiPath (NYSE: PATH ) has had a challenging year so far. Over the first two quarters of 2024, the stock tumbled 46.72% owing to a series of difficulties the firm had experienced.
Recently, it was reported that UiPath would lay off one in 10 workers to cut operational costs. According to a company filing, the move is expected to result in $17 to $25 million in restructuring costs over the next seven quarters.
However, the stock’s hardships may be short-lived, with UiPath showing strength in the growing robotic process automation (RPA) software landscape. These strides in automation have gained momentum in the age of generative AI, and the company has incorporated cutting-edge technology to leverage responses to product inquiries .
Crucially, there’s also growing speculation over UiPath’s future and the possibility that the stock’s recent falling value could make it an attractive prospect for a merger or acquisition opportunity.
Either way, the short-term volatility caused by UiPath’s recent layoffs has helped to push the stock into undervalued territory, making it a strong, albeit risky, prospect for investors to pick up.
Teradyne (TER)
In terms of exciting undervalued stocks, there’s perhaps no better opportunity for investors in robotics than Teradyne (NYSE: TER ).
Teradyne has enjoyed an impressive year, growing 41.54% over the first two quarters of 2024 to a market capitalization of $24.84 billion. While this may not be ‘undervalued,’ the industrial robotics specialists could be set for greater growth.
Founded in 1960, Teradyne is an experienced entity in an industry largely populated by startups and SMEs. The robotics specialists also operate as the parent company of Universal Robots and Mobile Industrial Robots.
However, the trick up Teradyne’s sleeve is announcing a partnership with Nvidia to bring AI capabilities to industrial robots. News of the collaboration arrived in March, and markets have responded quickly, with much of the stock’s growth occurring in Q2 2024.
Additionally, institutions have taken a keen interest in Teradyne, with Daiwa Securities Group recently increasing its position in shares of the stock by 900 to a total of 17,782.
So, why is the stock undervalued? Investors have an opportunity stemming from the impact of Teradyne’s collaboration with Nvidia on the future rollout of industrial robots. Investors may also find value in TER’s upcoming Q2 2024 earnings report, in which expectations suggest that profits could fall 3.8% to $0.76 per share.
Cognex (CGNX)
Another example of an innovative stock that still has room to rally is machine vision firm Cognex (NASDAQ: CGNX ).
The stock grew 15.91% over the first half of 2024 but ended Q2 more than 50% adrift from its all-time high of $93.99, recorded in 2021.
The company’s first-quarter earnings report hints at its Wall Street performance. Cognex’s headline statement confirmed that it had beaten guidance in a “challenging but stable business environment.” This indicates that the firm has experienced slower growth in the wake of recent economic challenges.
With this in mind, the long-awaited return of optimism to Wall Street and the expected arrival of Federal Reserve rate cuts could strengthen the stock’s fundamentals.
Now is a good time for investors to consider Cognex because the company has recently ramped up its suite of cutting-edge hardware. In particular, the April launch of the AI-powered 3D machine vision system, the In-Sight L38, has been heralded as a ‘world first’ for the industry.
On the date of publication, Dmytro Spilka 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 did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Dmytro is a finance and investing writer based in London. He is also the founder of Solvid, Pridicto and Coinprompter. His work has been published in Nasdaq, Kiplinger, FXStreet, Entrepreneur, VentureBeat and InvestmentWeek.
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