Date: Mar 11, 2013 Author: CNBC Staff Source: CNBC (
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Ever since the heyday of science fiction films in the 1950s, humans have kept watch on the evolution of robots. One analyst told CNBC that 2013 could be the year robots become a force to be reckoned with. But instead of fearing a rise of the machines, humans should look at how they can invest in them.
James Ross, senior portfolio manager at Alliance Bernstein, told CNBC that 2013 will see the sector reaching a "critical mass" and is primed for growth with recent advancements in technology. "We forecast a step change in the automation market over the next few years. Currently worth around $100 billion, we expect it to quadruple by 2020, putting it on a par with the market for e-commerce," he said in a research note.
There's a number of different stock plays out there according to Ross. The growth of 3-D printing -- creating three-dimensional solid objects from digital models -- means companies like Proto Labs and Stratasys are attracting interest, he said "This is a huge technology, it's definitely going to be very big indeed. It will disrupt traditional manufacturing big time," he told CNBC Monday. "You don't need nearly as many factories in China, or Africa if that's next." But it's not only 3-D printing that is turning heads, according to Ross. Self-driving cars and home-cleaning robots are already emerging as well. "I know this stuff sounds like science fiction, but it is actually becoming science fact," he said.
FANUC, the world's largest maker of industrial robots, produces factory robots used in China's giant manufacturing sector and is a good investment option, according to Ross. Intuitive Surgical, which is making hospitals more efficient by performing surgical operations, is another attractive option, he said.
Ross also singled out iRobot as attractive despite its exposure to the production of military automation -- budgets in the sector are beginning to be reduced. Ross says that a medical solution made by the firm, which is effectively a monitor on a "stick" that allows doctors to remotely visit hospital patients, offers potential.
Alliance Bernstein predicts there will be two clear phases in this "automation revolution." It will begin with the manufacturing sector pushing the growth rate in the world market for automated products from around 6.5 percent a year to well over 20 percent after 2015. Then by 2020, it expects a second phase to kick in, with automation spreading to the services sector.
There's enough spare processing capacity in a chip to allow interactions with the real world to be controlled and that's why automation is taking off right now, that's the core driver out there," he said.
Hans Redeker, global head of foreign exchange at Morgan Stanley, told CNBC that this next tech revolution could be realized if we saw more demand for it, and that demand could be addressed by some help on the supply side. "If we see the combination of this technology revolution, some new stuff coming in, plus governments changing the way of doing their fiscal policies then I guess we can be hopeful," he told CNBC Monday.
Contrasting this latest surge in automated machines to the tech boom and eventual bust in the early 2000s, Redeker explains that the valuation is very different now than it was in 1998-99 as the hype is now a lot less than it was.
This piece, by Matt Clinch of CNBC.com, originally appeared at CBNC.com.
Read more at http://www.thefiscaltimes.com/Articles/2013/03/11/How-to-Profit-from-the-Robot-Revolution.aspx#uik6DhHUgOAGSZcC.99
