The Bot Brief

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

- Victor Hugo

Bots In the News:

Several key failures during the final week of January caused a significant underperformance by the Bot Index versus the S & P 500. While the broad market enjoyed a reasonable gain of 1.38%, the bots tumbled 2.24%. By far the worst performer within the Bot Index was the 23.43% decline by iRobot. With the extraction of the buyout offer by Amazon (incidentally the second-best performer within the Index), iRobot is beset with heavy debt, a plethora of competition and a damaged reputation (apparently it wasn’t just European antitrust regulators that caused Amazon to withdraw). The company has been forced to reduce its workforce by 31% as earnings have tumbled into the red by $500 million in the past two years.

Rockwell Automation’s 27% earning miss drove the company’s stock down 11.53% making it the second worst performer within the Bot Index.

Beset with rising competition, a weakening Chinese economy and EV industry-wide perception problems, NIO Inc. declined nearly 10% during the week. The stock reached a three-year low as it closed at $5.45.

Other components – Offshore International   (-6.27%), Accuray Inc. (-10.90%), Fanuc Corp. (-10.98%) and Google (-6.60%) contributed to the Bot Index’s significant underperformance.

NVIDIA Corp. stock continues to respond to its leadership in AI chip production. The stock rose 8.40%.

Amazon Corp. jumped 7.98% following the collapse of its $1.4 billion acquisition target of iRobot. Apparently, investors viewed the combination as non-accretive and bit up the company’s stock.

Recent Headlines:

Not far from our Florida location, we were able to watch the most recent launch of a SpaceX logistics vehicle. According to new releases, NASA, SpaceX and Northrop Grumman successfully completed a Tuesday afternoon launch from Cape Canaveral to the International Space Station.

Filled with more than 8,200 pounds of supplies, the Cygnus cargo spacecraft, which is carried on the SpaceX Falcon 9 rocket, launched from Space Launch Complex 40.

The supplies reached the ISS on Feb. 1.

According to officials, highlights of the space station research facilitated by this delivery include:

• The first surgical robot on the space station
• An orbit re-entry platform that collects thermal protection systems data
• A 3D cartilage cell culture that maintains healthy cartilage in a lower gravity
• The MSTIC facility, an autonomous semiconductor manufacturing platform
• A metal 3D printer that will test the capability for printing small metal parts.
• The Cygnus spacecraft is scheduled to remain at the ISS until May, when it will depart and harmlessly burn up in the Earth's atmosphere.

A year or so ago, the Bot Brief carried an academic tome from the American Economic Association regarding productivity. The feature noted a general lag time between the creation of technological advance and its impact upon productivity. There was a parallel drawn between the advent of the steam engine and the robotic revolution and how it took years before the impact of steam power was manifested upon productivity.

It seems the influence of robots and, in particular AI, on production gains is now starting to be noticed. Every company and every country are rapidly expanding their research and application of AI. Fears of being left behind has stimulated a rapid shift in the view of automation as a hedge against inflation and an advance in countries’ defensive capabilities.

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.