AI and robotics are two attractive technologies with much business potential.
Symbotic is a compelling company, if only because it fuses those two elements.
Artificial intelligence (AI) is the hot IT functionality of the moment, and the science of robotics continues its relentless advance. Symbotic (NASDAQ: SYM), a relative newcomer on the stock exchange, is an enticing investment because it combines those two technologies into one company.
Of course, it takes more than clever robots to engineer a thriving business, so let's take a brief look at Symbotic. Is this of-the-moment company a good investment in the future?
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In terms of performance, Symbotic has been a boffo stock, all right. Had you put $500 into its equity three years ago from the date of this writing, your stake would be worth almost four times that, at $1,980.
Image source: Getty Images.
Symbotic fuses robotics and AI for the warehouse automation market. That's a juicy target given the proliferation of online retail and the efficiency it requires. Over the years, the company has roped in several big names in retail, such as Albertsons and Walmart.
The Symbotic-Walmart collaboration is deep and strong. In January, Symbotic acquired Walmart's advanced systems and robotics unit, and with it was drafted to develop and build automation solutions for the retailer. Walmart is paying its partner a cool $520 million for the work.
As is fairly normal for a relatively young tech company, Symbotic has been habitually unprofitable (also, it's expensive to develop and build robots).
It shines on the top line, however, where in its most recently reported quarter it managed to crank revenue 26% year over year to $592 million. And although it continues to book bottom-line losses, they aren't worryingly deep -- in said quarter, the shortfall was slightly over $5.9 million.
Symbotic feels like one of those companies that's in the right sort of business at the right time, and targeting the right markets for its wares. I think its revenue line will keep rising, and those net losses will eventually flip into profits. The hype for this stock is entirely justified, and though expensive, it feels like a buy.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Symbotic and Walmart. The Motley Fool has a disclosure policy.