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The Bot Brief

POSTED 01/14/2024

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

- Victor Hugo

 

Bots In the News:Bot Index vs. S & P 500

While the Bot Index got a boost from two of its Japanese holdings this week, their performance contribution was insufficient to overcome the 20% decline in iRobot. Keyence Corp. rose by double digits for the week and OMRON Corp. jumped 7.43%, however, the bots’ best performer was Intuitive Surgical who gained 12.78%. According to Zachs Research, “This company is expected to post quarterly earnings of $1.47 per share in its upcoming report, which represents a year-over-year change of +19.5%. Revenues are expected to be $1.86 billion, up 12.5% from the year-ago quarter.”

NVIDIA Corp. was the second leading stock in the Bot Index as it gained 11.43%. The company was subject to a plethora of positive articles during the week that 1) Predicted that the stock would soon be split; 2) The Motley Fool anticipates the stock could increase another 20% in 2024; 3) It is rumored that Nintendo will power its new configuration of Switch 2 gaming consoles with NVIDIA’s next generation Tegra SoC chips.

The drone manufacturer, AeroVironment rose 7.18 percent following, “its first successful multi-drop, live fire GPS-guided Shryke munitions from the VAPOR® 55 MX, all-electric unmanned aircraft system in collaboration with Corvid and L3Harris Technologies. The VAPOR 55 MX carried four rounds simultaneously and flawlessly showcased the live fire effects of this capability. The integration of Shryke munitions on the VAPOR 55 MX allows for multiple targets to be designated in one single flight. "Shryke’s size and weight make it the ideal choice for the weaponized VAPOR 55 MX. The lethality of a 40mm anti-armor modular warhead paired with a lightweight glider provides a highly effective, low-collateral damage solution to the front lines," said Kyle Bowen, Corvid’s Shryke business development director.

iRobot’s dramatic decline was attributed to the missing of a data deadline by Amazon to European regulators. Apparently, Amazon is no longer willing to fight the anti-trust demands required by the bureaucrats in the EU. The $1.7 billion acquisition of iRobot by Amazon appears to investors to be in jeopardy.

Beset with supply chain issues due, in part, to the turmoil in the Red Sea, shares of Telsa declined 7.83% during the week. Combining with the parts delays, the EV industry was hit by bad news from a major car rental agency. Hertz announced that it was selling 20,000 of its 100,000 Teslas, as it winds down its push to convert a major portion of the fleet to electric vehicles. CBS reported Hertz was selling the Teslas for as little as $21,000 on its used car website. NIO Inc., a Tesla rival in the EV space declined 11.04%.

2020's Decade of Bot Index Performance

Innovation and Regulation:

The American Economic Review ran an interesting article entitled The Impact of Regulation on Innovation. Using French data on medium sized corporations, the authors Philippe Aghion, Antonin Bergeaud and John Van Reenen concluded that companies that employ 50 more employees are subject to sharp increases in regulatory burdens than those just below that labor threshold. Hence, there is an ‘innovation valley’ just below the 50-employee realm as management is discouraged from innovation due to the high cost of the growth that would ensue. The article noted that all innovation, though most significantly in those below the regulatory onset. The evidence of the article pointed to a 5.7% reduction in aggregate innovation due to increased regulatory burdens.

 

 

 

 

 

 

 

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 view 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 the material presented.