2 Top Automation and Robotics Stocks to Buy in October

Core Viewpoint - The industrial economy is currently weak due to high interest rates, but investing in automation and robotics stocks like Cognex and Emerson Electric is recommended for long-term growth potential [2][3]. Group 1: Market Trends - There are favorable long-term trends favoring investment in automation, driven by the need for productivity and quality enhancements as manufacturing reshoring occurs [3]. - The automation market has faced downturns due to supply chain issues and inventory management challenges post-lockdowns, impacting delivery times and order placements [4][5]. Group 2: Cognex Corporation - Cognex's key markets, including consumer electronics and automotive, have been negatively impacted by high interest rates, while logistics is beginning to recover [6]. - The company anticipates a long-term market growth rate of 13%, with Cognex expected to grow at 15% annually as machine vision adoption increases [8]. - Lower interest rates are expected to facilitate a return to Cognex's long-term growth trajectory [7]. Group 3: Emerson Electric - Emerson Electric focuses more on process automation, generating 34% of its revenue from discrete automation, which is traditionally seen as lower growth compared to its peers [9]. - The company has restructured its portfolio to increase exposure to automation, divesting its climate control business and acquiring NI for $8.2 billion [10][11]. - Emerson's core process automation market has strong growth drivers related to clean energy technologies, making it an attractive investment despite its current valuation [12]. Group 4: Future Outlook - Lower interest rates are expected to aid the recovery of Cognex's and Emerson's sales in 2025, as inventory issues are resolved [13]. - Cognex is projected to return to a growth rate of 15%, while Emerson aims for 4% to 7% revenue growth and double-digit earnings growth [13].