3 ETFs to Invest in Robotics Stocks

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The robotics market is booming, with projections calling for a 15.1% CAGR to $169.8 billion by 2032. As a major player, in the global market, the U.S. is expected to rake in $784.6 billion from robotics in 2024 alone, largely due to advancements in artificial intelligence (AI) and automation - and especially generative AI, which has been making headlines.

Money is pouring into robotics companies, too. In July, investments totaled $1.3 billion across 47 deals. One standout example is Serve Robotics , whose stock jumped over 300% in a month after NVIDIA invested $3.7 million.

But if you're thinking about making a robotics investment of your own, it's not necessary to speculate on individual stocks. There are ETFs (exchange-traded funds) that offer broader exposure to the robotics and AI theme, allowing investors to benefit from this megatrend over time. Let's look at three top funds that each take a slightly different approach to investing in robotics.

ROBO Global Robotics & Automation Index ETF (ROBO)

The ROBO Global Robotics & Automation Index ETF is a solid choice for investors seeking exposure to the robotics and automation sectors. Launched in 2013, ROBO is one of the largest and most established robotics ETFs, with $1.07 billion in assets under management.

ROBO tracks the ROBO Global Robotics and Automation Index, which measures the performance of companies in the global robotics and automation industry. The fund holds a diverse portfolio of 79 stocks, with no single holding accounting for more than 2.2% of the ETF's value.

The fund's top holdings include well-known names in the robotics and automation field. Intuitive Surgical , the maker of the da Vinci surgical robot, is among the top five holdings at 2.20%. Other notable companies in the top 5 include wireless sensor specialist Samsara (2.20%), ServiceNow Inc. (2.13%), motion control tech company Novanta Inc. (1.99%), and automation firm Zebra Technologies Corp. (1.99%).

ROBO's performance has been mixed in recent years. While it has shown promise in capturing the growth potential of the robotics and automation sector, it has underperformed the broader S&P 500 Index since its inception. ROBO is down 8.1% on a year to date basis, though the stock's roughly 12% pullback from its annual high may provide an appealing entry point.

ROBO's expense ratio is 0.95%, which is relatively high, but understandable given the fund's specialized focus. Investors also get a small dividend yield of 0.05%.

First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT)

The First Trust Nasdaq Artificial Intelligence and Robotics ETF is an attractive option for investors looking to gain exposure to the growing AI and robotics sectors. Launched on Feb. 21, 2018, ROBT tracks the Nasdaq CTA Artificial Intelligence and Robotics Index, focusing on companies involved in AI, robotics, and automation across various industries.

With around $463.7 million in AUM, ROBT is a smaller fund compared to some of its peers, but it's been steadily growing, with a net inflow of $30.56 million over the past year. This growth shows increasing investor interest in the potential of AI and robotics technologies.

The ETF holds a diverse portfolio of 114 stocks, which provides broad exposure to the sector while mitigating single-stock risk. Top holdings feature big names like new S&P 500 member Palantir Technologies (2.96%), AI fintech platform Upstart Holdings (2.51%), cloud software company ServiceNow (2.41%), cybersecurity stock SentinelOne (2.37%), and genetic testing specialist Illumina Inc. (2.25%). The ETF's passive management style aims to replicate the performance of its underlying index, giving investors a comprehensive view of the sector's potential.

ROBT is down 10% in 2024, providing an opportunity to buy the dip in this growth-focused ETF.

One of ROBT's strengths is its relatively low expense ratio of 0.65%, which is competitive for a specialized thematic ETF. This lower cost structure can help preserve returns for investors over the long term.

ROBT also offers a modest dividend yield of 0.28%, paid quarterly. While not substantial, this provides a small income stream for investors, which is uncommon among many growth-oriented tech ETFs.

For investors seeking targeted exposure to AI and robotics while tempering the risks associated with picking individual stocks, ROBT offers a balanced approach with its mix of established and emerging companies in the field.

Global X Robotics & Artificial Intelligence ETF (BOTZ)

The Global X Robotics & Artificial Intelligence ETF is a popular choice for investors seeking to capitalize on the growth potential of robotics and AI. Launched in 2016, BOTZ tracks the Indxx Global Robotics & Artificial Intelligence Thematic v2 Index, which focuses on companies that could benefit from increased adoption and utilization of robotics and artificial intelligence.

BOTZ has a significant asset base of $2.55 billion, making it one of the largest robotics ETFs. The fund holds a concentrated portfolio of 44 stocks, with a strong emphasis on large-cap companies, which account for 51.5% of its holdings.

The top five holdings include global tech industry leaders NVIDIA (11.04%), Intuitive Surgical (10.64%), Swiss automation giant ABB Ltd (9.96%), Japanese sensor specialist Keyence Corp (8.05%), and Tokyo-based automation company SMC Corp (5.79%). This diverse mix across various industries and regions helps reduce risk, while providing exposure to the key players driving innovation in robotics, AI, and automation.

Performance-wise, BOTZ has been on a slow but steady upward trend over the past year, with a 52-week gain of 15.1%. Its 2024 performance has been more modest, with a 4.8% gain, but the ETF has outperformed its rival robotics ETFs - likely due to its heavy NVDA exposure. That said, with BOTZ down 11% from its March highs, investors can still buy the dip on this ETF.

BOTZ also has a relatively low expense ratio of 0.68%, which is competitive for a thematic ETF. The fund offers a modest dividend yield of 0.16%, making it more suitable for growth-oriented investors rather than those seeking income.

Conclusion

In conclusion, with the robotics, automation, and AI industries poised for significant long-term growth, investing in ETFs like ROBO, ROBT, and BOTZ offers a smart way to tap into this exciting trend. Each fund has its own twist, from ROBO's broad market approach to BOTZ's concentrated bet on industry leaders. While the returns have been muted so far, the explosive growth potential in robotics and AI makes them worth a look for patient investors with a longer-term time frame.

On the date of publication, Ebube Jones did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

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CEO Jensen Huang Sells Chunk of NVIDIA Stock, But Why You Shouldn't

Zacks

Wall Street darling NVIDIA Corporation NVDA saw its market capitalization climb to $2.61 trillion from $358 billion two years ago with the advent of artificial intelligence (AI). However, NVIDIA stock’s unparalleled surge this year hit a speed bump lately due to the violation of antitrust laws, and AI bubble qualms.

Meanwhile, CEO Jensen Huang has sold NVIDIA’s shares, which makes us wonder whether the chipmaker has the potential to increase shareholder wealth. Let’s have a look –

NVIDIA Stock – CEO Sells Shares, Volatility Intensifies

The Securities and Exchange Commission filings revealed last week that Huang off-loaded more than $633 million of the chipmaker’s stock since June. Huang has sold shares in tranches of 120,000 each from June 13 to Sept. 5, which accounts for almost 5.3 million shares.

On Friday, NVIDIA’s shares posted their worst two-week stretch in two years, while the world’s most sought-after AI player was subjected to wild price swings over the past month that dwarfed even the most volatile assets like cryptocurrency.

Geopolitical tensions to legal issues plagued NVIDIA, with the stock witnessing a $279 billion wipeout in a single trading session last week. The U.S. Department of Justice subpoenaed NVIDIA in a mounting antitrust issue.

Does this sound depressing? Fear not; the NVIDIA stock has an upside potential, and remaining bullish would reap benefits in the long run. Here are the positive reasons –

NVIDIA’s Blackwell Chip to be a Game Changer

Investors are waiting for the rollout of the cutting-edge new Blackwell chips. However, engineering snags have delayed the process. NVIDIA has been addressing the design flaws in the Blackwell B200 chip and aims to launch it by the year-end. So, the delay period is not long enough to impact the NVIDIA stock’s 2025 results.

Microsoft Corporation MSFT, Alphabet Inc. GOOGL and Meta Platforms, Inc. META have already ordered Blackwell chips worth billions of dollars, and Amazon.com, Inc. AMZN is expected to move from Hopper to Blackwell.

NVIDIA confirmed that the demand for Blackwell has surpassed supply and may continue into the next fiscal year. After all, the Blackwell platform has more AI throughput than the current Hopper platform. The new Blackwell graphic processing unit (GPU) has greater processing power, which is the most pressing need. It holds 208 billion transistors, way more than the 80 billion in the present H100 CHIP. Also, Blackwell’s NVLink offers high-speed communication, which is the need of the hour.

Thus, strong demand for the Blackwell chip is expected to boost the NVIDIA stock following its launch. Lest we forget, NVIDIA’s shares surged by double digits in the three months following the launch of two previous architectures — Hopper in the fall of 2022 and Ampere in the spring of 2020.

Neither NVIDIA Stock Nor AI is in a Bubble

In the dot-com bubble, companies’ shares scaled upward based on hype before the real impact of their business models could be felt. However, AI has become an integral part of all businesses. According to Markets and Markets, the AI industry is poised to expand from $214.6 billion in 2024 to $1,339.1 billion in 2030.

NVIDIA is well-poised to make the most of the flourishing AI industry since its chips are essential for AI models deployed across several verticals, including cloud computing. This explains why the company’s H100 graphic cards have huge demand in the AI chip market. Moreover, unlike the stocks in the Internet bubble, NVIDIA has solid fundamentals that validate the company’s stretched valuations, and squash bubble fears.

NVIDIA has generated profits competently since its return on equity (ROE) is almost 120%, which is way higher than the Semiconductor - General industry’s 73.2%. Notably, any ROE above 100% shows that the company’s net income is more than its equity, or the performance is strong.

NVIDIA’s net profit margin is 55%, above the industry’s 47.6%. Any net margin of 20% indicates the company can curtail costs and generate profits.

What’s more, NVIDIA recently approved a stock buyback worth $50 billion, indicating a healthy corporate organization. Share repurchases decrease the number of outstanding shares and increase the value of the remaining shares, which bodes well for shareholders (read more: NVIDIA Approves $50 Billion Stock Buyback: Time to Buy?).

2 More Reasons to be Bullish on the NVIDIA Stock

Being the worldwide leader in GPUs, NVIDIA’s stock will benefit. Huge data is expected to migrate from central processing units to GPUs, per Huang. According to Precedence Research, the GPU market will expand from $56.55 billion in 2023 to $1,414.39 billion by 2034.

NVIDIA’s collaboration with Siemens to enter the metaverse space and the introduction of GeForce in the growing gaming market will act as a tailwind for the company. As a result, the $2.80 Zacks Consensus Estimate for NVIDIA’s earnings per share is up 76.1% yearly.

Strong Price Upside for NVDA Shares

Banking on the highly anticipated launch of the groundbreaking Blackwell chips, inherent capability to crush bubble concerns, the introduction of stock buyback plans, and a dominant player in the semiconductor space gives NVIDIA’s shares the fuel to scale northward despite the current hiccups.

Prominent brokers, thus, have increased the average short-term price target of NVDA by 40.2% from the stock’s last closing price of $106.47. The analysts’ highest price target is $200, indicating an upside of 87.9%.

Moreover, the NVIDIA stock has been trading above the 200-day moving average year to date, a tell-tale long-term uptrend. This is why investors should hang on to this multi-bagger stock and not let it go.

NVIDIA stock has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

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Stocks Move Higher After Today's CPI Report

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Discover Financial Services

+0.09%

Capital One Financial

The S&P 500 Index today is up +0.58%, the Dow Jones Industrials Index is up by +0.06%, and the Nasdaq 100 Index is up by +1.52%.

After starting the day in the red, stocks have rebounded this afternoon. As reported in today’s US consumer price report, core consumer prices in August rose +3.2% y/y, unchanged from July and well above the Fed’s +2.0% target.

US MBA mortgage applications rose +1.4% in the week ended September 6, with the purchase mortgage sub-index up +1.8% and the refinancing mortgage sub-index up +0.9%. The average 30-year fixed rate mortgage fell -14 bp to a 19-month low of 6.29% from 6.43% in the prior week.

US Aug CPI eased to +2.5% y/y from +2.9% y/y in July, right on expectations and the smallest increase in 3-1/2 years. However, Aug CPI ex-food and energy was unchanged from July at +3.2% y/y, right on expectations.

In the wake of last night’s debate, the odds on the betting website PredictIt of Vice President Harris winning the presidency rose to 56% from 53% before the debate.

The markets are discounting the chances at 100% for a -25 bp rate cut for the September 17-18 FOMC meeting and at 19% for a -50 bp rate cut at that meeting.

Overseas stock markets today are lower. The Euro Stoxx 50 is down -0.04%. China's Shanghai Composite fell to a 7-month low and closed down -0.82%. Japan's Nikkei Stock 225 closed down by -1.49%.

Interest Rates

December 10-year T-notes (ZNZ24) today are up by +5 ticks. The 10-year T-note yield is down -2.1 bp at 3.622%. Dec T-notes today rallied to a 15-month high, and the 10-year T-note yield fell to a 15-month low of 3.603%. Strength in European government bonds today is providing carryover support to T-notes. Also, today’s slide in stocks has boosted safe-haven demand for T-notes.

T-notes fell back from their best levels after the US Aug core CPI rose +3.2% y/y, right on expectations but well above the Fed’s 2.0% price target. The core CPI report knocked the chances of a 50 bp rate cut at next week’s FOMC meeting down to 17% from 50% last Friday. Supply pressures are also negative for T-notes as the Treasury will auction $39 billion 10-year T-notes later today. Losses in T-notes are limited due to carryover support from

European government bond yields today are moving lower. The 10-year German bund yield fell to a 5-week low of 2.092% and is down -3.8 bp at 2.093%. The 10-year UK gilt fell to a 5-week low of 3.745% and is down -7.1 bp at 3.748%.

Swaps are discounting the chances of a -25 bp rate cut by the ECB at 100% for the September 12 meeting.

US Stock Movers

Bank stocks are under pressure for a second day after JPMorgan Chase President Pinto said Tuesday that analysts are too optimistic in projecting next year's expenses and net interest income. As a result, Discover Financial Services is down more than -4%. Also, Capital One Financial , Regions Financial , Citizens Financial Group , Cincinnati Financial Corp , and M&T Bank are down more than -3%.

Health insurance stocks with Medicare Advantage plans are falling for a second day after Leerink Partners published a report Tuesday that said those plans might have a tougher time earning high-quality “star ratings” that drive bonus payments. As a result, Humana is down more than -5% to lead losers in the S&P 500, and UnitedHealth Group is down more than -2% to lead losers in the Dow Jones Industrials. Also, CVS Health Corp is down more than -3%, and Elevance Health is down more than -1%.

Albemarle is up more than +8% to lead gainers in the S&P 500 as lithium stocks rallied after UBS said CATL curtailed lithium production at its Jiangxi operation.

Starbucks is up more than +1% to lead gainers in the Nasdaq 100 after CEO Niccol said he is open to exploring a new joint venture partnership structure in China.

Trump Media & Technology is down more than -14% following last night’s Harris-Trump debate, as the odds on the betting website PredictIt of Vice President Harris winning the presidency rose to 56% from 53% before the debate.

GameStop is down more than -16% after reporting Q2 net sales of $798.3 million, weaker than the consensus of $895.5 million.

Palantir Technologies is down more than -2% after a trading update showed exchange-traded funds managed by Cathie Wood’s Ark Investment Management sold 124,626 shares of Palantir.

Rollins Inc is down more than -4% on negative carryover from a -20% plunge in peer Rentokil after it issued a surprise downgrade to its full-year growth estimates.

Morgan Stanley is down more than -1% after Goldman Sachs downgraded the stock to neutral from buy.

Viridian Therapeutics is up more than +8% after Needham & Co. raised its price target on the stock to $48 from $30.

AES Corp is up more than +4% after Jeffries initiated coverage on the stock with a recommendation of buy and a price target of $20.

Viking Therapeutics is up more than +7% after JPMorgan Chase initiated coverage on the stock with a recommendation of overweight and a price target of $80.

William-Sonoma is up more than +1% after Jeffries upgraded the stock to buy from hold with a price target of $156.

Earnings Reports (9/11/2024)

Designer Brands Inc (DBI), Oxford Industries Inc (OXM), Vera Bradley Inc (VRA).

On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policyhere.

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Nvidia CEO Jensen Huang Admits 'It's Tense' As Surging Demand For Blackwell Chips Sparks Customer Frustration

Benzinga

Nvidia Corporation CEO Jensen Huang said some Nvidia customers are becoming frustrated and tensions are rising due to the limited supply of the company's latest Blackwell chips.

The Details:

According to a Bloomberg report, Huang told the audience at a Goldman Sachs Group Inc. technology conference that the company is experiencing such great demand for its Blackwell chips that it is causing tension and frustration among some of Nvidia's customers.

"The demand on it is so great, and everyone wants to be first and everyone wants to be most," the CEO said. "We probably have more emotional customers today. Deservedly so. It's tense. We're trying to do the best we can."

Read Next: What’s Going On With Palantir Stock?

Huang said that the company outsources the physical production of its hardware, and Nvidia's suppliers are doing their best to keep up with demand.

He also addressed concerns related to the rising geopolitical tensions surrounding key Nvidia-supplier, Taiwan Semiconductor Manufacturing Company Ltd. . Huang speculated that Nvidia could switch suppliers if it becomes necessary, but warned that such a change could result in lower-quality products.

The Nvidia CEO said the company chooses to use TSMC because it is the best in the field and its "agility and their capability to respond to our needs is just incredible," he said. "And so we use them because they're great, but if necessary, of course, we can always bring up others."

NVDA Price Action: According to Benzinga Pro, Nvidia shares are up 5.03% at $113.54 at the time of publication Wednesday.

Read Also:

What’s Going On With AMD Stock Today?

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AMD Gains Ground in AI Chip Market, Oracle Exec Confirms Growing Demand: Report

Benzinga

Advanced Micro Devices

Advanced Micro Devices, Inc client Oracle Corp acknowledged the chip designer gaining traction in the data center chip market for artificial intelligence despite Nvidia Corp’s moat.

Oracle cloud business executive Karan Batta told the Information regarding customers’ openness to multiple vendors for inference computing implying opportunities for AMD and rivals.

Recent reports indicated AMD is currently ditching the premium gaming GPU market for the mainstream and mid-range GPUs. The update followed after AMD hired Nvidia’s Keith Strier to helm AMD’s AI vision.

BofA Securities analyst Justin Post hailed the recent Oracle and Amazon.Com Inc partnership. This partnership offers cloud providers a sizable opportunity to unlock demand for infrastructure and applications, which in turn implies demand for Nvidia and AMD AI chips.

Mai Capital Management portfolio manager Chris Grisanti, in a CNBC interview, cold-shouldered the recent semiconductor and AI chip stock selloff, citing sustained AI ambitions of cash-rich Big Tech giants.

JPMorgan analyst Harlan Sur projects AMD’s revenue from data center GPUs to grow by $5 billion in the current fiscal year.

AMD stock gained 35% in the last 12 months. Investors can gain exposure to AMD through iShares Core S&P 500 ETF and Vanguard Total Stock Market ETF .

Price Actions: AMD stock is up 2.32% at $156.15 at the last check Wednesday.

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Us Closer To Greenlighting Nvidia Chips For Saudi Arabia, Semafor Reports

Reuters

NVIDIA

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Adds Department of Commerce response in paragraph 8

Sept 11 (Reuters) - The U.S. government is considering allowing Nvidia NVDA.O to export advanced chips to Saudi Arabia, which would help the country train and run the most powerful AI models, Semafor reported on Wednesday, citing people familiar with the matter.

The sales of the chips were a main but unofficial topic at GAIN, Saudi Arabia's global AI summit, the report said.

Attendees of the summit, including some who work for the Saudi Data and AI Authority, told Semafor that the country is making efforts to comply with U.S. security requirements to expedite the acquisition of the chips.

The Biden administration imposed sweeping new curbs on AI chip exports last year, in a bid to cut off more avenues for China to obtain them, imposing a licensing requirement on their shipment to the UAE and other Middle Eastern countries.

The Saudi government is expecting shipments of the company's most advanced chips, Nvidia H200s, according to the report. The H200 was first used in OpenAI's GPT-4o, a multimodal platform capable of realistic voice conversation with the ability to interact across text and image.

Saudi Arabia has taken steps to limit its involvement with Chinese firms, while keeping the door open to China should the United States halt the kingdom's access to the most advanced U.S. chips, the report said, citing people with knowledge of Saudi policies.

An Nvidia spokesperson declined to comment on the report.

The U.S. Department of Commerce declined to comment on the specifics but said "export control decisions regarding licenses, entity listings and any future policy actions are the subject of a rigorous interagency process including the Departments of Commerce, State, Defense and Energy".

(Reporting by Juby Babu in Mexico City; Editing by Alan Barona and Shilpi Majumdar)

(( Juby.Babu@thomsonreuters.com ))

Keywords: USA-NVIDIA/SAUDI ARABIA (UPDATE 2, PIX)

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