These Automation Stocks, ETFs Are Poised To Benefit From Biden's Boost To Manufacturing
According to Deloitte, the manufacturing sector faces a widespread shortage of skilled labor.
Last year, three-quarters of manufacturing executives surveyed by the National Association of Manufacturers showed that "attracting and retaining a quality workforce" is “a primary business challenge."
Some 83% of manufacturers quoted in the report said they believed smart factory solutions "will transform the way products are made in five years."
The Biden administration’s ongoing effort to bolster U.S.-based manufacturing and impose tariffs puts the automation industry in a strategic position to cut costs to remain competitive.
And automation combines emerging technologies in two distinct sectors: artificial intelligence (AI) and robotics. Some of the most prominent plays in this regard include:
- NVIDIA Corp (NASDAQ:NVDA)
- Qualcomm Inc (NASDAQ:QCOM)
- Microsoft Corp (NASDAQ:MSFT)
- Alphabet Inc Class C (NASDAQ:GOOG).
Among the automation stocks to watch, include:
- Rockwell Automation Inc (NYSE:ROK) is one of the biggest and oldest names when it comes to companies developing automation tools for industrial production. The market, however, didn't respond well to a Q2 earnings call earlier this month, with several analysts lowering its price target.
- Teradyne Inc. (NASDAQ:TER) is focused on automating testing equipment for various industries including semiconductors. The company's stock has climbed almost 40% in the past month, and Goldman Sachs upgraded its rating to Buy earlier this week.
- Amkor Technology Inc. (NASDAQ:AMKR) provides packaging technology for the semiconductor sector. The company announced Thursday it plans to invest $2 billion in a new packaging and testing facility in Arizona.
- Global X Robotics and Artificial Intelligence ETF (NASDAQ:BOTZ) is the largest ETF covering artificial intelligence and automation, by assets under management. It's followed by Global X Artificial Intelligence & Technology ETF (NASDAQ:AIQ) and iShares Robotics and Artificial Intel Multisector ETF (NYSE:IRBO).
In the U.S.. several new efforts have sprouted to re-localize key industries domestically, most notably for semiconductors as well as electric vehicles (EVs) and green energy.
The Biden administration continues to push legislation meant to give domestic manufacturing a boost. The 2021 Infrastructure Investment and Jobs Act, for example, allocated $1.2 trillion into construction, transportation, clean energy and digital infrastructure.
There was also the Creating Helpful Incentives to Produce Semiconductors And Science (CHIPS) Act, which put $280 billion to work on regaining the lead on developing and building semiconductors — widely regarded as the most important commodity of decades to come.
Now Read: EXCLUSIVE – Investing In AI? Diversify ‘Beyond The Likes Of NVIDIA’ Says WisdomTree’s CIO
Shutterctock image.