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Weekly Bot Brief on Robotic Companies and the Industry

POSTED 10/17/2021

"There is no force on earth more powerful than an idea whose time has come."       Victor Hugo

Bots in The News:

A resurgence by several of the Japanese components of the Bot Index allowed the bots to gain 2.50% for the week. That number exceeded the broad market’s 1.82% return and broke a three-week string of underperformance. While there were no double-digit gainers in the Index this week, the bots were led by the 7.33% jump by Tesla. While heavily in the news were both the company and Mr. Musk, the gain was more likely a result of the Wall Street firm Jefferies who bumped up its target price on the stock from $850 to $950.

Fanuc Corp. and OMRON Corp., both Japanese companies, generated returns of 7.19% and 5.25% respectively. However, Yaskawa Electric Co. fell by 7.53% and was the weakest of the only three losers in the 30-stock index.

Along with Tesla, the Index had 8 other holdings whose gains exceeded 4%. Perhaps in sympathy with Tesla, shares of competitor in the EV market, NIO Ltd., rose 5.25%. NVIDIA (+4.95%), Cognex (+5.13%), ABB Ltd. (+4.36%), Oceaneering International (+4.58%), and Rockwell Automation (4.27%) rounded out the winners for the week.

Power play:

Much like magnetism and gravity, electricity is somewhat hard to define and envision. It is certainly not an element, nor is it a liquid or a solid or even a gas. It is simply a force of nature that mankind has been able to harness for a multitude of different uses. Electricity is considered a ‘secondary’ energy source which is simply to say it is derived from primary sources such as coal, chemical reactions, natural gas, wind, tides, solar, oil and nuclear power. It is virtually essential in the creation and application of robotics. Whether through battery power or access to a centralized power production source, there are virtually no gasoline powered robots with the probable exception of some drones.

With this reliance upon electrical power in the robotics industries, the Bot Brief has devoted many pages to the access, availability, and cost of advances in the technology of power production and distribution. In the October 9th issue of The Economist, there was another feature on the prospects of hydrogen power. We have commented on both hydrogen fuel cells and ammonia (a byproduct of hydrogen) and their potential to compete as future sources of electricity. While hydrogen has the moniker of the fuel of the future….and always will be, the rising costs of alternative fuels, growing populations and technological advances may make hydrogen an attractive participant in the energy industry. According to The Economist, regarding hydrogen, “Its appeal is threefold. It is very energy dense: burning a kilogram of it provides 2.6 times more energy than burning a kilogram of natural gas. When burned in air it produces none of the sulfates or carbon monoxide through which fossil fuels damage air quality both outdoors and in, though it does produce some oxides of nitrogen; when used in a fuel cell, a device that uses the reaction between hydrogen and oxygen to produce electricity without combustion, it produces nothing but water. And because it can be made by electrolysis, or from coal, it was held to free its consumers from the tyranny of oil producers.

While technology has yet to make the production of hydrogen as energy positive as will be needed for competition, Goldman Sachs anticipates that the demand will grow from the current 50 million tons to over 500 million by 2050. Their estimate is that the demand from transportation needs will be the biggest portion of that pie, with 140 million tons devoted to heavy duty rail and highway transportation. That having been said, hydrogen is likely a potential power foundation for a multitude of robots whose application will be instrumental in the ‘manning’ of the transportation and production industries

Member: American Economic Association, Society of Professional Journalists, United States Press Association. Institute of Chartered Financial Analysts, Robotic Industries Association, Member IEEE.

The Bot Brief is a weekly newsletter designed for economists, investment specialists, journalists, and academicians. It receives no remuneration from any companies that may from time to time be featured in the brief and its commentaries, analysis, opinions, and research represent the subjective views of Balcones Investment Research, LLC. Due to the complex and rapidly changing nature of the subject matter, the company makes no assurances as to the absolute accuracy of material presented.