The need to improve the speed and efficiency of warehouses is driving more automation. And that bodes well for Symbotic stock and others in the space.
Investment bank UBS last week said its latest warehouse automation business survey pointed to continued growth in spending. It polled 130 warehouse and distribution center operators worldwide.
The latest survey "reveals a good investment outlook," UBS analyst Sven Weier said in a client note. "While macro challenges cause investment decisions to take longer, the structural growth picture seems intact, with a low automation penetration rate and labor force pressure the main drivers."
The new survey results provided positive indicators for tech solutions firms Cognex, Honeywell, Symbotic and Zebra Technologies, UBS analyst Damian Karas said in a separate note.
UBS rates Cognex, Honeywell and Zebra shares as buy. However, it has a neutral rating on Symbotic stock because of its "high multiple and customer concentration."
Retail giant Walmart accounted for 87% of Symbotic's total revenue in fiscal 2024 and represents a significant part of its backlog.
Symbotic Stock On IBD 50 List
"These survey results reinforce our view, corroborated by our recent channel checks, that industry adoption is still relatively limited and that a wave of automation will take place through the end of the decade," Karas said.
Elsewhere on Wall Street, Arete Research analyst Jim Fontanelli initiated coverage of Symbotic stock last week with a buy rating a price target of 50.
On the stock market today, Symbotic stock rose 6.4% to close at 42.20.
Symbotic stock is on the IBD 50 list.
E-commerce leader Amazon.com has been a leader in warehouse automation. The Wall Street Journal reported Monday that Amazon is on the cusp of having more robots than humans in its warehouses. Amazon has deployed 1 million such machines in its facilities.
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