Stocks To Buy

3 Automation Stocks to Buy to Futureproof Your Portfolio

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The artificial intelligence (AI) boom may very well pave the way for a robotic revolution of sorts at some point down the road. Undoubtedly, robotics has been incorporated by numerous firms for quite some time now.

From Amazon (NASDAQ:AMZN) bots being used at its warehouses to lighten the load for its human employees to Walmart (NYSE:WMT) robots moving through the aisles to manage inventory effectively, it seems like there’s no escaping the physical representation of the AI technologies of the future. Even visionary business magnate Elon Musk has been getting in on the robotics action, with Tesla (NASDAQ:TSLA) previously pulling the curtain on its impressive humanoids.

Only time will tell what the future holds for robotics. But I’d not be afraid to bet on some public behemoths with skin in the game. Here are three intriguing automation stocks to buy if you’re looking to get ready for AI-powered robots that aim to improve our lives.

Tesla (TSLA)

First, we have shares of Elon Musk’s electric vehicle (EV) firm, Tesla, the worst-performing Magnificent Seven member of the last. The company has its robotaxi event scheduled for August, but I have no idea if it’ll relieve TSLA stock. Given the state of full self-driving (FSD), I would not get my hopes up while TSLA stock drops like a rock.

For investors seeking robotics and automation exposure, though, there’s perhaps no larger robot than Tesla vehicles. While I wouldn’t count on Tesla robotaxis to drive you somewhere while you take a nap anytime soon, I also think far too many people are discounting the impressive tech underneath a Tesla hood.

It could take many years before Tesla robotaxis bid drivers farewell. But in the meantime, I like the modest price of admission. I’m also a fan of Tesla’s new humanoid robot, Optimus, which may change how we view Tesla.

Is it a car company or an AI and robotics company, as Musk believes? Only time will tell. In any case, I’m compelled to buy the dip as Tesla continues evolving amid the auto slump.

Amazon (AMZN)

Amazon is an e-commerce juggernaut that’s also been tapping into next-generation robots to help at its many warehouses. Unless you’ve walked into one of Amazon’s impressive fulfillment centers, you may not know that it’s undergoing quite the robotics revolution.

It’s quite profound to see the many warehouse robots hard at work. As robotic workers get faster and more efficient, margins could be boosted over the coming decade. If a firm could use a margin jolt, it’s Amazon, as it looks to leave its brutal 55% crash of 2022 in the rear-view mirror.

Additionally, Amazon’s Sequoia and Digit robots may evolve into yet another service that helps change the future of the warehouse forever. Indeed, given Amazon’s recent focus on services, I’d not be surprised if we start viewing the e-commerce and cloud juggernaut as more of an AI and robotics firm in the near future.

With Amazon Web Services (AWS) CEO Adam Selipsky stepping down, AMZN stock has felt a bit of a pinch, falling 0.58% on a day that saw broader markets take off. I think the relative underperformance could signal an opportunity to buy.

Walmart (WMT)

An image of a Canoo, Inc. (GOEV) Walmart electric delivery vehicle

From one retail giant to another, we have Walmart, a firm that’s made major strides to catch up to the likes of Amazon. With an impressive e-commerce platform and one of the best grocery delivery services on the market, Walmart certainly seems like it’s embraced the tech age.

As Walmart further taps into robotics to help around the warehouse, I view Walmart as being every bit as AI- and robotics-savvy as Amazon. A strong case could be made that Walmart has become a tech company that just so happens to be the largest retailer.

As more warehouses welcome new robots, I think it’s hard not to be enticed by the stock at just 31.3 times trailing price-to-earnings (P/E). Given its scale and tech talent, it has a lot to gain as the robotics revolution unfolds.

On the date of publication, Joey Frenette owned shares of Amazon. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Joey Frenette is a seasoned investment writer specializing in technology and consumer stocks. Contributing to the Motley Fool Canada, TipRanks, and Barchart, Joey excels in spotting mispriced stocks with long-term growth potential in a fast-paced market.

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