The tariffs crisis has silver linings for the AI, robotics and automation sector but investors will have to fasten their seatbelts for continued volatility, fund manager Robocap says.
The leading investor in robotics, automation and AI listed stocks – whose Robocap UCITS Fund has delivered compound annualised net returns (CAGR) of 11.84% and a net return of 181% since its inception in 2016 – says it can see opportunities for medium- to long-term investors.
Robocap stresses that chipmaker Nvidia NASDAQ:NVDA, which has been hit hard by the crisis, has suffered four 40% plus drops in the past 10 years but has still seen its share price increase by a multiple of 100 times.
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Acceleration in AI developments
Robocap reckons tariffs are likely to drive more reshoring of manufacturing to the US which, given its high labour costs, will mean “strong secular demand tailwinds” for robotics and automation. Companies are also likely to accelerate Artificial Intelligence developments to help dilute rising inflationary pressures.
The fund manager has identified several positions in software in its portfolio where there is no direct or indirect impact from tariffs and believes the development and roll-out of technologies such as Robo-Taxis will be relatively unaffected.
Robocap’s portfolio was adjusted to be tariff-light ahead of the US government announcement and is being further adjusted to include long-term buying opportunities in existing positions and to potentially add new companies.
Jonathan Cohen, Founder and CIO of Robocap, said:
“The strong pace of innovation and continued demand in AI and robotics remains solid, since this technology will be a key driver of growth, cost-reduction and industrialisation and reshoring in the coming years. There are silver linings for the sectors.”
Cohen says these are not normal times and feels investors will have to fasten their seatbelts through the volatility: “Our investment thesis remains more valid than ever, and this crisis creates opportunities for medium- to long-term investors.”
Cohen attended Nvidia’s San Jose GTC conference in March and believes the company has multiple avenues for growth and is likely to increase their technology moats versus their competitors in a number of key areas.
However Robocap warns the tariffs announced have been worse than market expectations and the risk of recession has risen both inside and outside the US.
