While Asia has been the biggest market for current generation robots, thanks to advanced mobility and bandwidth, each iteration can deliver more feedback to and from robots. This is especially important in areas where remote robotics – battlefield, emergency situations, space exploration – are going to be key allies to human work.

As mentioned earlier, large companies, like AMZN, have been embracing new generations of smart robots in their warehouses and other places. That allows them to fulfill orders at a much faster rate with more accuracy as well.

This kind of automation is the real driving force in the robotics sector because it adds to productivity and efficiency for the businesses that are using them.

As you can see from the CAGR below, smart robotics demand is 10 percentage points higher than the broader robotics market in general.

Smart robotics also will reinvigorate Old Economy players, like Caterpillar (NYSE: CAT),that are continually looking to adapt their equipment to the latest technologies for better performance.

The new sectors where robotics are driving precision work is also expanding rapidly.  The best example is ISRG and its DaVinci line of surgical robots.

Other Plays in The Robotics MegaTrend

Of course, the “intelligence” of the robots is limited by their “brains,” and it’s the companies that are building those brains that will also see a growing revenue stream for their technologies. Chipmakers, like NVIDIA (NASDAQ: NVDA), Arm Holdings (NASDAQ: ARM), and Advanced Micro Devices (NASDAQ: AMD) will be there.

Also, chip equipment makers like Lam Research (NASDAQ: LRCX), and ASML (NASDAQ: ASML) will also be winners.

Some robotics ETFs exist for investors that would prefer to take a broader approach to the sector initially, such as ARK Autonomous Technology and Robotics ETF (ARKQ).

Investing in companies that will benefit from increased robotics is another way to go, since it will likely increase efficiencies and boost margins. Automobile manufacturers, such as Ford (NYSE: F) or General Motors (NYSE: GM), are among the companies that could see the biggest benefits, but restaurant operators such as McDonald’s (NYSE: MCD) and logistics companies such as UPS (NYSE: UPS) and FedEx (NYSE: FDX) could use next-generation robots, as well in order to expand their business and/or to bring down costs.