4 Robotics Stocks You’ll Wish You Bought Sooner

It's the term making headlines in every major AI company and it's still in its very early stages. Joining us today is Marketbeat analyst Jeffrey Neil Johnson with a rundown of four different ways to really invest in robotics or this new physical AI movement. And he has four specific stocks to go with each of those sectors we're going to talk about. So Jeffrey, let's just jump into what is physical AI and why are we hearing this term so much right now. Okay, so physical AI is kind of a new term that's being coined throughout the industry and I think that it's being done to differentiate between the old school robotics, industrial robotics, and the current state of robotics. Kind of like the difference between your old flip phone and a smartphone. You kind of got to give it a differentiating name. Once it has a brain and can make decisions for itself, it's no longer a robot as much as it is an extension of an AI platform creating a physical version of the AI brain that it's running. >> Yeah, it's a little scary to think about. It feels sci-fi, but it is not sci-fi. It is very much already underway and under development right now. We just heard from the Nvidia CEO in this week's earnings call just this last week, and physical AI was mentioned so many times. And then of course physical AI. NVIDIA is practically the only company serving physical AI today and we've been working on physical AI for a long time. That is also growing. So our our share of inference is growing very quickly. When I talk about physical AI and I talk about how the rest of the hundred trillion dollar industry that has not been impacted by it in the last 30 years, it's about to be impacted by AI. That is the segment that I'm talking about. A really vivid description, Jeffrey, of what the future could look like and what kind of a role these physical AI agents could play in really every kind of industry out there. It's wild to think about, but it's not that far off. >> Yeah, it really isn't. It's become just kind of like the natural order of things to move that AI into a physical body. It's the the sci-fi order of things. There's really the natural movement of the industry would be to then have that AI doing like the physical things. We're a bit away from the sci-fi imagined version of like humanoid robots taking care of things and you know unloading your groceries and that kind of stuff for you. But we're really you know not that far from it. And the initial phases of that are going to be the integration of AI sensors and AI cameras, devices that gather information for AI so that it will continue to learn and that's going to happen more like in your factories, in your retail environments. So this is just the next step of AI starting to learn the physical world around. >> Yeah. I also loved what you said that there's a differentiation between what this physical AI is and what the robotics industry has been so far because robotics is not a new term. This is something that has been in development for decades and continues to grow and develop. You can also check out a brand new article on marketbeat.com right now on the five robotic stocks to watch as physical AI builds momentum. Clearly, this story is gaining a lot of steam right now, although some of the names we're going to cover today are down at near 52-E lows. So, it's an interesting topic and a great time to be looking at this. You can scan the QR code or click the link in the description to get that free article right now on marketbeat.com. But Jeffrey, let's get to your list. What's the first area of investment that you want to talk about with physical AI? >> Okay, so the first section is going to be your robot builders. And these are going to be your pure play companies that are using AI and robots to solve a problem today. There are quite a few companies that are working on this, but probably the one that is doing it the best and doing it with the most impact would be Intuitive Surgical and they are ISRG and um they're kind of like the established recurring revenue powerhouse. They have a um a robotic surgery system called the Da Vinci system. They most recently had an upgraded version of that called version five that came out that does a lot more complex maneuvers. The system basically allows for doctors to do surgery with robots and for AI powered surgeries to happen. So things like lung biopsies and other things that are that are semi- routine, the robot can figure out how to do it on its own or with very minimal doctor intervention. >> Yeah, this is a company that has popped up in several videos we've done over the last year or so in robotics. It's done incredibly well, but when you look at the stock chart, it has had uh quite a pullback from the exciting highs that it had back in November of last year. We saw that huge spike for Intuitive Surgical. Wondering if you can dive into a little bit of why we saw so much excitement around this name and why that excitement has dwindled off the last few months. >> Everything that got so hype back in November AI wise all just kind of has faded down in general. I think Intuitive has paid for that, you know, um, with its current stock price decline, but they have so many interesting catalysts coming up that the decline really kind of sets you in a place where you might uh, where investors that are interested in robotics might consider it a valid entry point for their portfolio. >> Yeah, let's talk about why now is a good entry point to think about as when you look at the long-term growth potential for Intuitive Surgical. Again, we know so many of these AI tech robotic stocks tend to move on headlines and overall market sentiment. When there's a frenzy in the market, we see these stocks go up a lot. When people aren't talking about them as much, they tend to go down. But talk about no matter what those headlines are saying. What does that long-term outlook continue to look like for Intuitive Surgical? >> Back in April, April 21st, they had um an excellent earnings report. It was an even beat, you know, across the board. But the important metric in that uh earnings report was that they had a 17% increase in surgical performance. So there was an increase in the amount of surgeries that they were doing with the robot. You've got to remember that this is a razor and blade model. So you have the robot, which sells for an incredibly high price, but then every single time that they do a surgery, that robot's going to need scalpels. it's going to need all the different stuff that it needs for that surgery and all of those items are proprietary to intuitive surgical. So it it creates a recurring revenue for them and so as the systems are placed which they placed 235 systems in the last quarter the revenue should just continue to increase. They launched their Da Vinci 5 system which is a much better system. It's like 10,000 times more capable and uh has 10,000 times I guess more computational power. And then in uh March, they got FDA clearance for a force feedback machine. And anybody that's ever played video games knows that playing video games with a force feedback is much better than without. So it's going to allow the surgeons to actually feel sort of what they're doing, give them a sense of feeling. So all of those are previous catalysts, but up and coming, you've got their July 28th earnings report. And then most importantly is effective June 2026, Japan has authorized seven individual robotic surgeries. And so the Japanese government is set to start reimbursing intuitive surgical in June of 2026 for seven different types of routine surgicals that they want done with these robots. So when you look at the past and the future, you can see that they're executing on a very solid level and that this company is making strides. >> Both really interesting points to look at this summer that could be some really good catalyst for this one. A great first stock to look at. Now we're moving on to another stock and a whole another area of robotics that you can consider investing in. What's the second area that you're looking at, Jeffrey? >> Right. So the next area you're going to look at is the enablers. You're going to want to look for companies that make the sensors, that make the motors, that make different parts of the robots. And the one I feel like is probably the most important because um I mean for AI, if you can't see what you're doing, you really can't make decisions. And so I'm looking at Cognex, which is CGNX, and they're pretty much the undisputed champion when it comes to making visual components for robotics, as well as visual components for the factory floor. So when you see like in an Amazon warehouse, you see like a million packages a second flying by, and you're thinking to yourself, how in the world is this system sorting these packages as they fly by so fast? That's going to be a Cognex vision system. When you see videos of, for instance, machines picking berries in the field and you see it picking thousands and hundreds of thousands of berries a minute and it's kicking all the bad ones out individually. That's a Cognex vision system. It's an AI powered vision system designed to do one thing really fast and and they seem to be the top of the line in that industry. >> Yeah, that's a great way to describe it. and you see how is it scanning all of these things so quickly. That's exactly what this tool is for and it's so essential in the entire physical AI robotic story because those visual receptors are important. Let's talk about how much more growth this one could have. I know we just had the discussion with the first one, but with this one right now we're seeing robotics. We're seeing it in lots of areas in automated cars and things like that too. But if those humanoid robots do become mass manufacturing thing, what kind of growth potential does this specific element have uh in the future? >> They have huge growth potential. You know, they had a blowout Q1 uh May 6. They significantly beat across the board and that was primarily because of the recovery, the automotive sector and the electronic sector coming in and then they also signaled really strong forward forward momentum. Then just a few days later, they actually launched the one vision system. It's a uh cloudtoedge AI suite that allows you to use their AI and their vision sensors to then send recommendations to whatever AI you're using. I think that as they continue, you know, they've got Q2 earnings coming up late next month, and that's something you'll want to watch to see that they continue to blow it out because as industrial automation continues to grow, as AI powered security continues to grow, as any type of AI powered, anything that needs vision continues to grow, you're going to see this company continue to grow because of the way that they are leading the vision portion of robotics. products and AI. >> Now, let's talk about that chart action just a little bit. I think sometimes when retail investors see a chart like this, they go, "But it's already up over 100% in the last year. Why would I want to get in now after it's run up so much?" But when you look at what the analysts are saying about this one, too. There's small upside on consensus, but there's some higher price targets for this one, too. What are your thoughts on what analysts are saying and also the kind of price action that we've seen in this chart? you're seeing this is up like 77% year-to date, but um that really should be seen more because it's not a series of major spikes. It's healthy growth. I think that it should just be seen as um validation that this is the way the market is going. I think that as it continues to grow in a healthy way, it can only get better for this stock. Like I said, the market's looking more for like tangible revenue generating plays. And so as money rotates out of speculative investments into more tangible investments that are actually generating revenue, you can see money moving into these stronger players like Cogmex that are actually paving the way for the more humanoid type robots as they continue to develop their vision software and vision hardware. >> Okay, so we've talked about the body, we've talked about the eyes, the vision for robots. Let's move on to the other area of investment for physical AI. >> So right now the biggest play in robotics really is the automation of the factory floor because a lot of these robots are going to go to work in factories as well as you know in households and other environments. So the AI brain that is being trained now with sensors on the factory floor will be translated directly over into the humanoid AI robot will which will eventually take its place on the factory floor. So for that the next pick is going to be Rockwell Automation. Um they're ro they've been around for 120 years and they are the gold standard when it comes to industrial sensors. the different PLC's, industrial computers, programmable logic circuits that run factory floors and that generate the data that would been that would then be fed back into the AI to make recommendations on how to improve for instance your your revenue, how to improve speed, how to make things more automated, how to make things work faster, better, and more efficient. >> Yeah. When I hear a company like this that's the gold standard, they've been around for a long time. They've been developing a lot of these kinds of automations for a long time. I think sometimes investors can look at that and say, "Well, are they going to be on the cutting edge if they've been around for so long?" What's your thought on a company like this as far as quickly implementing the new AI advancements, the new adjustments, or do companies like this that again have been around for so long, do they tend to have kind of that slower uh adoption rate of new technology? I feel like um this company will ramp up and is ramping up very quickly because the simple fact of the matter is they've been around so long that their logic controllers and their sensors are a mainstay. And so what ends up happening is kind of like a reverse osmosis. People that are writing software to monitor, for instance, factory lines, to monitor warehouse lines, they're already um integrated with these Rockwell sensors. And so what ends up happening is the programmer ends up writing around the Rockwell architecture. So instead of looking at as a looking at it as a situation where Rockwell is going to be selling a ton of new stuff to a ton of new customers. It needs to be seen more as a situation where they've been there and they're so integrated into the backbone of the dumb electronics that roll through manufacturing. Uh now that when the AI developers and the AI programmers are writing for different industries, they're going to naturally write their software around the digital central nervous system that Rockwell has created within the factory. >> Interesting. and I'd like to hear your take on that for sure. Let's move into the stock chart and where this is at right now. Again, this company's been around for forever, but in the last few months, it's certainly seen some volatility. What's behind all of the moves the stock has seen? >> They're a little bit removed from the AI thesis. So, their movement really isn't tied so much to like the changes in AI and the adoption or non-adoption rates of AI. a lot of their movement has been caused by the reshoring efforts that are coming, the new factories that are speculatively being built in America right now. Uh the data centers that are that are speculatively being built in America right now as well. So any major change in those thesises will bleed off onto Rockwell. So if there's a change in the reshoring thesis, that's going to bleed off onto Rockwell and cause a down day. If there's a change in the AI thesis, that's also going to bleed off into Rockwell, causing a bad day for them. And so where they're exposed to so many volatile industries right now, the stock really has no choice but to also be volatile. >> Yes. And we're certainly seeing that show up in the stock price. A good third pick to look at there, Jeffrey. Let's move on to this fourth stock that you have for us today. And this is one I think we had on the channel before talking about robotics. It's one I do not have on my Bridgette Spies watch list yet and I'm excited to add it to my watch list. If you have not checked out Bridges yet, you can scan the QR code or click the link in the description to take a look at some of the stocks we talk about on this channel every day. I usually like to add one stock per video and then follow how it moves over time through this paper trading watch list. All right, let's get to this fourth name. Again, it's the one I want to add to Bridget's buys. >> So, we've talked about the pure play builders like I surgical who, you know, have revenue coming in from the robots that they're selling. We've talked about enablers that make vision and make sensors for the robots. And we've talked about the central nervous system and the more stable plays. So, the next place we want to go is just speculative plays, the pie in the sky, moonshot type of stuff that's going on right now with robots and that will continue to go on in the robotics industry until it kind of levels out and creates its own standard. So I think that probably the best speculative play in the market right now that's more of a pure play, right? Because we could say Tesla is a speculative robot play, but it's not so much a pure play. I'm looking at Serve Robotics, which is SERV, and they are the makers of those little bitty robotic um like delivery vehicles that you see on college campuses and in cities that pull up and drop off your food and then leave. they um have had, you know, little struggles here and there with with their equipment, with their robots, but when it comes to a a moonshot venture, I think they're the closest to achieving something with physical AI that uh that is useful that is also mass adoptable. >> Yeah, mass adoptable is really the key here to actually see that commercialization. And I I completely agree. This is one of those companies that is really on the cutting edge. They're one of the first to actually try to make this a commercial product right now. You can see them in cities or across the country right now. But I'm curious because they're first, are they kind of similar to the last question, are they going to be able to keep up with the evolving technology with how quickly this whole physical AI story is evolving? Do you think that that gives them an edge because they're first and they'll continue to upgrade and update uh what they currently have as models that they have commercial? Or do you think that that their focus is on that commercialization too early that they might miss some of that development phase? >> Being first means that your AI is learning more and has learned more than your competitors coming in with maybe a less capable AI. That could kind of be seen in their Gen 3 vehicles that are coming out. These are like set it and forget it type vehicles where you put the instructions in, you're going to go to McDonald's, you're going to pick up an order, and you're going to take it to Bridget's house and drop it off. Right? Once you give it those instructions, the robot takes off and does this on its own. So, you're not really involved in any of that last mile type stuff, that capability is exclusive to serve robotics right now. And that's specifically because their AI models have become adapted enough to be able to pull that off. Now, the flip side of that is also true because one of the caveats for Serve is is that they recently stopped the deployment of new Gen 3 models so that they could focus on making sure that the AI brain does everything that it's supposed to do in order to be able to execute through those Gen 3 models. So, that kind of is the answer to both sides of it. They the moch widens as they focus on the development of their proprietary technology. I also think the argument you made about them having more data. I think that's a that's a great thing to be made that when it comes to AI growth and who gets there quickest, it's who has enough of the the data and the information. And with robots traveling all over the country already, I do think that gives them some of an advantage. That's an interesting take, Jeffrey. I like that. When we talk about speculative buys, you know, I mentioned Tesla earlier. They'll be able to use all of that car data, the the car video data that identifies people and identifies stop signs and identifies babies and buggies and all those things and they'll use that data to feed into their Optimus robot. Right? So, it really is the winner of the largest data set that can be used to train these AIs to become smart before you put them into a physical body. That's going to be the leader of the race. a really great point for for Tesla and for this company too. And also another thing that I think is so interesting about Serve right now, I thought that this was interesting when we talked about on the show before, but right now looking at the chart, it makes this really interesting. It's still speculative, of course, but it's less of a barrier to entry with how far this chart has fallen. Let's talk about the why. Why are we seeing the downtrend uh in this name right now? >> Well, because it's so skeptical, you know, and they have they have a a fairly long path to profitability. They have kind of a limited use case right now just delivering Uber Eats, you know, to and Door Dash to people, but the entry point for this is is very attractive compared to where they've been in the in the past. And then you start looking at some of their uh white papers and some of their CEO commentary and some of the stuff coming from their management and you start looking at, you know, they're doing fairly well delivering food, but what happens if they sign a last mile delivery contract with Walmart or what happens if they sign a contract with a major hospital chain to deliver surgery equipment and medicine from one floor to another? There are so many use cases for these little bitty robots to run around and deliver things um from the manufacturing floor to the health care center to outside on the street delivering packages and products. you know that that once the AI and the body catch up to a place where they're extremely reliable, once it gets to the point that these are extremely reliable and you're not seeing Tik Tok videos of them driving into the front of a building over and over again or spinning in the snow, you know, something crazy like that. Once it gets to that point, they'll start getting more and more use cases in in more and more stringent environments. Once they get everything combined in the most efficient way, this stock still has a lot of room to grow. >> I think that point about making them more reliable, we've seen that time and time again. Anytime in this AI story, you think about AI video, even two years ago, three years ago, every AI photo had, you know, six fingers or eight fingers or something like that. There were these crazy mistakes. Well, it didn't take much, maybe 6 months to a year later, and it is making these scarily accurate videos and representations of people and things like that. So, I am sure something similar is going to happen with physical AI and these robots. I it might be maybe a longer case study of how long it takes for them to be more reliable and accurate, but I know we've seen it happen in on our computers. I can see that very much so. Same story playing out in robotics as well. >> You're right. And you're seeing that right now when you see videos of, for instance, the delivery robots running into buildings over and over again. The jogging robot that ran a marathon, trip over a wire, and just explode into a million pieces. is you see the Michael Jackson robot performing on stage and tripping over a step. These are similar to the six-fingered AI videos that you know you were talking about before and it is the next iteration. You know, you can see the parallels from physical AI to video AI happening right now. So, you know, like you said, it could only be a matter of a year or two before this technology takes off. >> Who knows how quickly this robotics and physical AI story could become reality. those humanoid robots could be closer than that 8 to 10 years down the road. Who knows? Jeffrey, thanks for the great conversation today. If you're looking for other robotics names to consider right now, make sure to watch this other very popular interview we had on the future of physical AI and just how big this area of AI growth could be. You can find that full interview