- Robotics, automation, and artificial intelligence (RAAI) are getting a boost from the coronavirus pandemic.
- Travis Briggs, CEO of ROBO Global, shared with Business Insider five RAAI stocks best positioned for gains in the decade to come.
- Two of the three indexes his firm oversees have increased fivefold since he joined in 2014.
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The outbreak of COVID-19 around the world has shifted economic structures, as home-bound consumers begin to shop online more and firms scramble to replace workers with robots.
Large-cap tech stocks like Amazon, Microsoft, Apple, and Facebook have eminently reaped the benefits of this new reality. But so, too, have many robotics, automation, and artificial intelligence firms (RAAI).
Travis Briggs, the CEO of ROBO Global, says the economic changes resulting from the coronavirus pandemic have left RAAI firms in the perfect position for ongoing profits in the years ahead.
"I believe the ROBO Index is positioned better than ever, as evidenced by some of the shortcomings we've seen have been exposed by the COVID pandemic — supply chains and the ability to automate as many processes as possible," Briggs recently told Business Insider, referring to the first-mentioned index above.
Since Briggs joined ROBO Global in 2014, the firm's three indexes and the ETFs that track them — the ROBO Global Robotics and Automation Index, the ROBO Global Healthcare Technology and Innovation Index, and the ROBO Global Artificial Intelligence Index — have performed strongly: the first index has doubled in value, and the latter two have increased roughly fivefold. Year-to-date, the indexes are respectively positive 8%, 27%, and 26%.
Though he thinks the RAAI sub-sector generally will continue to perform well following the COVID-19 outbreak and he recommends investing in a diversified product like an exchange-traded fund, Briggs mentioned five companies in particular whose stocks he thinks are set to climb over the years to come.
5 stocks best positioned after the technological shifts caused by coronavirus
The first is Cognex Corporation (CGNX), a machine vision-systems manufacturer. The company's stock is up 19% year-to-date.
"The advancements in machine vision has been dramatic in recent years. When you think about machine learning, it penetrates nearly every facet of robotics and automation — drones, robots, logistics, and industrial manufacturing robots," Briggs said. "The more automation will grow, the market will get bigger, and so will their market share with it."
Second is Daifuku (DFKCY), a Japanese materials-handling firm. Daifuku's share price is up about 38% year-to-date.
"The best performing sub-sector since its inception has been digital automation — that's the subsector that Daifuku falls in — so when you look at the underlying driver of that subsector, it's been e-commerce," Briggs said. "So the more consumer behavior moves to buying more and more online — certainly over the last 6 months and what's happened recently with this pandemic — you'll see this trend grow further."
Another is EXACT Sciences Corporation (EXAS), whose stock is down around 8.5% this year. The company is currently developing a colon cancer test with the ability to detect the disease earlier than is now possible.
Briggs also mentioned Veracyte (VCYT), a California-based genomics diagnostic company. Its stock is up more than 26% year-to-date.
"They're developing a mouth, ear, and nose swab that will have the ability to detect lung cancer at stage 1 rather than much later," Briggs said.
Lastly, Briggs recommended Teradyne (TER), a robotics maker whose share price is up 29% in 2020.
"It's now the largest robot manufacturer in the country, and they did that by acquiring a robot manufacturer called Universal Robots," Briggs said of Teradyne.
Still, Briggs stressed the importance of investment diversification within RAAI.
"It's very hard when you're dealing with the early stages of a disruptive technology to differentiate between the winners and the losers," he said. "You can go back to the early internet days for that."
He also recommended investors take a longer-term view of between three and 10 years.
"I think it's critical to take the long-term view," Briggs said. "I really have no idea what the market's going to do in the short term, but I'm very confident that over the next three years to 10 years we're going to continue to see an accelerated increase of interest in automation."
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