ARK Invest says growing use of robots could boost the S&P industrials

Aug. 12, 2021 3:48 PM ETARK Innovation ETF (ARKK), ARKQ, KROPAMZNBy: Jason Capul, SA News Editor27 Comments

Two autonomous industrial robotic hand with crossed conveyor belts at factory general interior view.
LeArchitecto/iStock via Getty Images

  • Cathie Wood's ARK Invest said Thursday in a new report that robotics use in the manufacturing industry is in its infancy, and wider adoption could help S&P Industrials stocks.

  • ARK wrote in the report that machines have altered the agriculture business over the past century, enhancing its profitability and offering a hint at what could be an impending, similar manufacturing revolution.
  • The firm said that while robot usage in overall manufacturing is already six times higher than in all other industries, it's still one-sixth that of the auto industry and one-fifteenth that of Amazon (NASDAQ:AMZN):

(Source: ARK Invest)

  • "If capital spending does accelerate automation, companies focused on operational efficiency should be able to increase their returns on investment," ARK wrote. "In fact, from 1990-2018, the decline in labor as a percent of revenue in the S&P Industrial sector seems to have contributed to an increase in its operating margins."
  • Two of ARK's ETFs that provide exposure to automation and robotics are the flagship ARK Innovation ETF (NYSEARCA:ARKK) and ARK Autonomous Technology & Robotics ETF (BATS:ARKQ) which were +0.47% and -0.08% at last check on Thursday.
  • However, ARK isn't the only ETF issuer that's bullish on automation in the manufacturing or agricultural industries.
  • For instance, Global X recently launched the AgTech & Food Innovation ETF (NASDAQ:KROP), which invests in companies involved in innovation in the agricultural space.
  • The firm recently noted that the global market for agricultural robots could reach $21B by 2026, almost triple the market size in 2020.
  • Global X AgTech & Food Innovation ETF (KROP) was -1.33% heading into the close in Thursday's trading session.
  • As for the future of robots in manufacturing, you can read ARK's complete report on the subject here.
  • Meanwhile, ARK wrote in a separate report Tuesday, that it's optimistic about the market opportunity in the Chinese healthcare sector.

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