Arm Stock And 2 Robotics And Automation Stocks To Watch Now

Japan’s modest rise in industrial output shows that manufacturers are still investing to keep production steady even as global conditions shift. That kind of resilience is a clear reminder that robotics and automation leaders sit at the heart of how factories stay competitive. For investors, this creates a clear theme to watch. This article highlights three Robotics and Automation Stocks that capture that opportunity.

The three Robotics and Automation Stocks below are just a starting sample, and the full screen surfaced 35 more companies with equally compelling narratives that are not covered here. To go deeper into this theme, identify your own angles and analyze which opportunities match your conviction, head straight into the Robotics and Automation Stocks screener.

MDA Space (TSX:MDA)

MDA Space is a Canadian space technology company that builds satellites, sensors and advanced space robotics, most visibly through its MDA SKYMAKER platform and the Canadarm3 system that support on orbit automation and lunar missions. It reports about CA$1.9b in revenue from a single integrated segment that combines geointelligence, robotics, space operations and satellite systems, reflecting a diversified mix of satellite manufacturing, data services and robotics solutions. The company has a market cap of about CA$6.5b, which puts it in the mid cap range of listed space and defense stocks.

For investors following robotics as a solution to structural labour shortages, MDA Space brings that theme into orbit through Canadarm3, SKYMAKER and autonomous rover systems that support satellite servicing and lunar operations. The story is tied to large, multi year contracts in satellites, defense and Earth observation, plus acquisitions like Blue Canyon Technologies and SatixFy that could deepen its technology stack. Against that, high capital spending, funding through both debt and fresh equity, and pressure on profit margins mean execution on the current CA$4.4b backlog and new program wins will matter a lot. If that balance between growth and capital discipline interests you, MDA Space may merit closer attention.

MDA Space’s multi year contract momentum and CA$4.4b backlog can give the appearance of pure growth, yet the real story lies in how that pipeline aligns with capital intensity and margins in the 3 key rewards and 4 important warning signs (1 is major!)

Arm Holdings (ARM)

Arm Holdings designs CPU, GPU, NPU and system IP that chipmakers license to power everything from smartphones to cloud servers, and that same IP underpins the embedded controllers and edge AI modules inside many industrial robots and smart factory systems. The company currently reports about US$5.2b in revenue from a single Semiconductor Equipment and Services segment, reflecting a broad licensing and royalty base rather than direct end market robot sales. With a market cap of roughly US$255.3b, Arm is already a heavyweight in semiconductor IP, which is why its role in the physical AI and automation cycle attracts close attention from investors.

Arm Holdings may be worth a closer look if you want exposure to the physical AI build out without owning a traditional hardware manufacturer. Its CPU, GPU and NPU designs power on device perception and control in robots and factory equipment. At the same time, licensing and royalty revenue supports the company’s margin profile. A key question for investors is whether the push into AI data center chips and any changes in robotics demand can justify the current valuation, given return on equity is around 12% and the balance sheet leans on external borrowing. For those weighing the trade off between a strong IP position and a premium price tag, Arm’s story remains a developing one.

Arm’s push into physical AI and data center chips is accelerating, while questions linger about return on equity and debt. Get the full story in the 2 key rewards and 1 important warning sign

Teradyne (TER)

Teradyne is a US$55.5b company that supplies automated test systems for semiconductors alongside a growing Robotics segment, where Universal Robots and MiR provide collaborative arms and mobile robots that plug directly into the physical AI build out on factory floors and in warehouses. Most revenue still comes from Semiconductor Test at about US$3.7b, with Robotics contributing about US$356 million and Product Test around US$386 million. The pure robotics exposure is meaningful but not yet the main driver.

Teradyne may be worth attention for investors seeking exposure to the robotics and AI manufacturing cycle through a business that already earns money from both chip testing and real world automation. The Robotics segment provides direct access to factory and warehouse automation, while AI centric demand in semiconductor testing, transactions such as the Quantifi Photonics deal, and a sizeable buyback plan all indicate that management is engaging with this trend. The catch is that robotics revenue has come under pressure, and trade policy remains a swing factor for customers across Asia and the US. How Teradyne balances that risk with its plans for AI test, robotics margins, and capital returns is a key area to monitor.

Teradyne’s Robotics and Semiconductor Test exposure could be masking a bigger story about how AI manufacturing and warehouse automation reshape its earnings mix. Get the context and key swing factors in the analysis report for Teradyne

Seeking Alternatives Before The Crowd Moves

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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