Industrial automation is nothing new. Rockwell Automation has been providing motor control solutions for factories since 1903; Zebra Technologies, founded in 1969, became globally renowned in the 1980s for its barcode scanning technology.
However, the emergence of artificial intelligence (AI) has propelled automation to new heights. According to Opto Foresight, by 2035, the annual output value of the AI robotics industry is expected to exceed $375 billion, with a growth rate of 17% per year. Within this vast blue ocean, Symbotic (SYM) is poised to become the biggest winner.
Symbotic is not a household name, but you have likely benefited indirectly from its technology. The company specializes in manufacturing AI-driven robotic systems for high-throughput consumer goods warehouses.
Its largest client is Walmart. The retail giant uses Symbotic’s solutions to handle online order fulfillment and store merchandise distribution. For a company with annual revenues exceeding $700 billion, investing in such high-capacity, near-zero-failure automation systems offers a considerable return on investment.
It is worth noting that while Walmart is both its biggest client and a major shareholder, this is far from the entirety of Symbotic’s growth story. Walmart accounts for less than one-tenth of total U.S. retail sales, and retail itself represents less than one-tenth of U.S. GDP. In the future, many sectors—such as manufacturing, logistics, agriculture, and even waste management—could become arenas for Symbotic’s AI platform.
The AI robotics field is not short of competitors. Tesla’s Optimus humanoid robot has garnered significant attention and may potentially enter households by the end of next year. In addition, companies like Agility, 1X, Apptronik, and Boston Dynamics are also developing general-purpose AI bipedal robots, some of which are already in use.
In the more practical automation solutions segment, Teradyne offers automated pallet-handling platforms similar to Symbotic’s; UiPath has expanded from software services into manufacturing automation by incorporating Kuka AG’s physical robots for tasks such as painting and welding.
Nevertheless, Symbotic holds a critical advantage: its technology is already well-proven. In the last fiscal year, the company’s revenue exceeded $2.2 billion, a year-over-year increase of 26%. Projected revenue growth rates for this year and next stand at 24% and 28%, respectively, through which Symbotic expects to fully shed its losses and achieve sustained profitability.
Since August of last year, Symbotic’s stock price has seen no net increase. However, as the milestone of profitability draws near, the stock is likely to regain its upward momentum. Unlike previous rebounds, if a rally begins, it will be supported by continuously growing profits. Of course, the stock carries above-average risk, and even if an uptrend starts, volatility will follow. But for growth-oriented investors who can tolerate risk, the potential returns may be well worth the wait.
