3 Automation-Focused Stocks Flying Under the Radar
Though artificial intelligence tends to get the biggest share of the hype, the robotics and automation industry is multifaceted—and fast-growing. The broader robotics space is expected to expand at a compound annual growth rate (CAGR) or 16.1%, reaching more than $165 billion by 2029, according to BCC Research. As companies face labor shortages and a need to accommodate significant increases in e-commerce business, automation and robotics can help them to improve efficiency, cut costs, and increase safety.
For everyday consumers, few household names exist in the robotics and automation spaces. Below, we'll take a closer look at three companies that may not be on the retail investor's list but which have the potential to be major players in automation as the industry continues to grow.
Long-Established Rockwell Uses Size and Stability to Its Advantage
Rockwell Automation Inc. (NYSE: ROK) supports a host of industries with its control systems, software platforms, motor control devices, and similar tools for automation. The company has grown to nearly $40 billion in size since becoming an independent entity more than two decades ago, making it a significant presence in automation and an important legacy player in industrial automation.
Despite the challenges of increasing costs and an inventory imbalance in recent quarters, Rockwell has done a good job of securing productivity savings. In fact, the company recently reported $360 million in total structural cost reductions over a period of five months. The company's margins also remain strong in the face of these obstacles.
For Rockwell, the advantages of being larger and better established than many rivals are a leg up on building recurring revenue (which climbed by 7% year-over-year for the latest quarter) as well as the flexibility to engage in strategic buildout and acquisitions as opportunities come up. The firm plans to invest $2 billion in the coming five years on digital infrastructure, plants, and talent, a move that could help to accelerate revenue growth and continued margin improvement.
Nordson's Niche Medical Equipment Angle Helped to Drive Growth
Nordson Corp. (NASDAQ: NDSN) occupies a different corner of the automation space thanks to its industrial and medical precision dispensing equipment. Coming off of strong third-quarter results—Nordson beat on both earnings and revenue and saw a healthy 12% YOY improvement to sales—the company has been working diligently to reduce its debt, buy back shares, and boost its dividend. All of these developments are likely enticing to investors (in particular, the recent 5% dividend increase, which helps to bring Nordson's yield to 1.44%).
Nordson's recent acquisition of medical infusion fluid delivery company Atrion has helped to drive growth, but as it plans to divest another portion of its medical business investors should be prepared for a potential slowdown in sales gains. On the bright side, this could provide an opportunity to buy NDSN shares at a greater value, as the company's stock is up more than 11% so far this year and the company's P/E ratio is a not-especially-compelling 28.6.
Analysts are optimistic about Nordson, rating it as a Moderate Buy overall and expecting another 12% upside as the company could grow its earnings by another 7% or so in the coming year.
Impressive Fundamental Business, But Valuation and Profitability Concerns Plague Symbotic
Warehouse and distribution center automation is a growing business, and Symbotic Inc. (NASDAQ: SYM) increasingly occupies an important place in both hardware and software development for the industry. Although the company had a mixed earnings season in August, with a surprise loss and a revenue growth of over 25% year-over-year, driven by strong customer adoption rates, its shares have nearly doubled so far in 2025.
Symbotic has adapted quickly to changing market conditions, and its new and popular high-density storage structure is evidence of that. However, the company must work to convince investors that it can achieve sustainable profitability and improve its margins.
Understandably, this firm is surrounded by a lot of hype. Given Symbotic's strong long-term fundamentals, cautious investors might look for an opportunity to capitalize on volatility in the downward direction.
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