Investing In Automation With 3 Robotics Stocks Tied To AI Chip And Defense Demand

Robotics and automation are moving from science fiction to the factory floor just as the world is wrestling with tight labor markets, persistent inflation risks and uneven growth across regions. While central banks weigh rate paths and energy prices keep pressure on costs, the physical AI trend refers to companies using machines to do more with the same or fewer workers. The Robotics and Automation Stocks screener filters for businesses that are not only building these systems but are also focused on balance sheet discipline. Below, you will see 3 notable stocks from this screener and the factors that differentiate them.

Kraken Robotics (TSXV:PNG)

Overview: Kraken Robotics is a marine technology company that supplies sonar and optical sensors, deep sea batteries and underwater robotic systems plus related survey services to defense and commercial customers worldwide. Its equipment helps militaries and offshore energy operators inspect, map and monitor underwater environments with high resolution imaging and data.

Operations: Kraken Robotics generates about CA$66.3 million from Products and CA$41.4 million from Services, with revenue spread across Asia Pacific, North America and Europe, Middle East and Africa.

Market Cap: CA$1.91b

Kraken Robotics stands out in the robotics and automation space because it sits at the intersection of rising defense spending on unmanned underwater vehicles and growing offshore energy and wind projects. At the same time, it is still working through losses and integration risk. The company is scaling higher value products such as SeaPower batteries and advanced sonar. It is also absorbing a roughly CA$615 million Covelya acquisition that could broaden its sensor and subsea intelligence offering but also adds debt and execution pressure. Analysts expect revenue and earnings growth if new capacity and contracts ramp as planned, although the current P/S premium and recent insider selling mean expectations are already high and setbacks could quickly change sentiment.

Kraken Robotics is being priced for smooth execution on defense and offshore demand, yet the full story sits in the expectations already baked into the stock and one key pressure point in the 2 key rewards and 1 important warning sign

ACM Research (ACMR)

Overview: ACM Research develops and sells equipment that chipmakers use to clean, plate, etch and package wafers, supplying critical tools for advanced semiconductor manufacturing in Mainland China and other regions. Its portfolio spans wet cleaning, electrochemical plating, furnace and PECVD systems, as well as advanced packaging tools used in memory, logic and AI related chips.

Operations: ACM Research generates about US$960.2 million from Semiconductor Equipment and Services.

Market Cap: US$6.4b

ACM Research sits in the middle of two powerful forces: growing demand for complex AI ready chips, and China’s push to build more of its own semiconductor capacity. The company has a broad toolset across cleaning, plating and packaging equipment, a history of multi year earnings growth, and guidance for 2026 revenue. Investors also need to weigh concentrated exposure to China, export control risk and a recent year of weaker margins. With a high but not extreme P/E, seasoned leadership and fresh capital from a follow on share offering, the key question is whether its growth, cash generation and balance sheet can keep pace with what is currently reflected in the stock price.

ACM Research sits where AI chip demand and China’s semiconductor build out meet, yet the real story hides in how expectations line up against its analyst forecasts for ACM Research and one underappreciated risk investors often overlook

Arm Holdings (ARM)

Overview: Arm Holdings designs and licenses chip architectures and related software that other companies use to build processors for smartphones, data centers, automotive systems, IoT devices and robotics, earning royalties on every compatible chip shipped. Instead of manufacturing chips itself, Arm sells the underlying blueprints and tools that sit behind much of the world’s low power computing.

Operations: Arm Holdings generates about US$4.9b from Semiconductor Equipment and Services, with revenue drawn from markets including the US, PRC, Japan, Taiwan, Korea and other countries.

Market Cap: US$295.9b

Arm Holdings has become a central supplier for AI ready CPUs in data centers and edge devices, with royalty and licensing revenue supported by a large developer ecosystem and adoption of higher value platforms like Armv9 and Compute Subsystems. Earnings are forecast to grow about 37% a year and revenue about 27.7% a year. However, the stock trades far above Simply Wall St’s DCF value and carries a very high P/B multiple, so expectations are demanding. In addition, there is heavy reliance on flagship smartphones, rising R&D spend, funding that leans on external borrowing and recent share price volatility. This presents a powerful AI infrastructure story where execution risk and valuation discipline both matter.

Arm Holdings’ AI story is accelerating, yet its rich valuation and heavy smartphone reliance raise sharp questions that many investors are only starting to weigh. The real twist sits in the analyst forecasts for Arm Holdings

The three stocks highlighted here are just a starting point, and the full Robotics and Automation Stocks screener surfaced 29 more companies that share equally compelling robotics and automation narratives around physical AI, aging workforces and the push to do more with leaner teams. Use Simply Wall St to identify, analyze and filter for the specific catalysts, balance sheet profiles and growth stories that matter most so you can focus on your highest conviction automation ideas in this emerging productivity shift.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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