Could Ouster (OUST) Stock 10X If Robotics Takes Off in the Next Decade?

Watch Our Video on Ouster’s 10X Potential 

In a recent AI Investor podcast episode, host Austin Smith and 24/7 Wall St. analyst Eric Bleeker broke down the exciting potential of robotics, particularly as artificial intelligence continues to evolve. Smith expressed his enthusiasm for the future of robotics, envisioning a world where mundane tasks like folding laundry and grocery shopping could be automated. Bleeker acknowledged the challenges in the robotics sector, particularly the reliance on the automotive industry, which is currently facing a downturn.

Bleeker specifically highlighted Ouster (Nasdaq: OUST), a company specializing in LIDAR technology, as a noteworthy investment opportunity within the robotics landscape.

Despite the current struggles of semiconductor stocks tied to automotive markets, Ouster is expected to see revenue growth from $144 million this year to $196 million next year, with a long-term projection of $290 million by 2027. Bleeker emphasized the importance of identifying companies that can execute well in a challenging environment, positioning Ouster as a top contender for investors looking to capitalize on the robotics trend.

As the conversation ended, Bleeker noted that Ouster is both high-risk and high-reward, and suggested investors could start a small position in case the company rides robotics growth to big gains in the years ahead. 

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If you’re on the hunt for more AI stock ideas, check out the latest episode of 24/7 Wall St.’s AI Investor Podcast. 

Each week, we break down the biggest news in the AI space and invest $500,000 in our favorite AI ideas. The best part? You can subscribe and follow along with what we expect to be the biggest trend in technology history for free. You can listen to the latest episode (where we break down Ouster’s potential upside) in either Spotify or Apple Podcast below. 

Transcript

Austin Smith (Host): I love that. Eric, onto trend three, my personal favorite. Our listeners can probably guess this based on my prior enthusiasm, and you had alluded a little bit to Amazon, having a lot of potential here.

But robotics, I am excited for AI to make its way into the 3D real world that we operate in so that I don’t have to fold my laundry or go get my groceries or other very benign chores. Although it will do significantly more than that. I want self-driving technology. I want everything. So talk to me about Trend three: Robotics.

Eric Bleeker (24/7 Wall St Analyst): When it comes to robotics, there is some difficulty in finding great supply chain plays because we don’t know how long it will take to reach a future where robotics are material in terms of revenue generation.

A problem that many of these companies face is that their main end market is the automotive industry, which continues to be at the bottom of a cycle. The semiconductor stocks that performed the worst this earnings season were NXP Semiconductor, Texas Instruments, and Qualcomm, all of which have high exposure to automotive.

So when you look at stocks not enjoying the AI boom in semiconductors, it’s primarily these stocks with automotive exposure that also stand to benefit the most from robotics.

Ouster, ticker symbol OUST, is a company I’ve been researching. They’re a leader in LIDAR technology. We’ve all heard about LIDAR because of its role in self-driving cars.

This was a technology that everyone wanted a piece of, and we saw a lot of SPACs happening in 2021 to capitalize on it. I believe Ouster went public around that time, and there was a lot of excitement.

However, a challenge for self-driving cars is that Tesla is pushing towards a solution that does not use LIDAR, opting instead for cameras, which has dampened some of the buzz in the industry. But robots will almost certainly need LIDAR technology, which provides another catalyst for the future.

When I look at the available investing options, I see that every company claims to have differentiated technology. The question is, which ones are actually delivering the most and executing well in this challenging environment? I believe Ouster is executing the best. They’re expected to have revenue of $144 million this year, with Wall Street expectations projecting growth next year to $196 million. 

And I have the number for 2027 at $290 million against a $1.2 billion market capitalization.

They will be losing money during that time, but they seem to be a company that’s executing on growth.

So, Austin, looking at plays we can buy to increase exposure to robotics, this is one that is at the top of my research list right now. It’s small and could either be close to zero or could see significant growth over the next five years. That’s the profile you want to position in a portfolio, with a 1% allocation, allowing you to buffer the losers with some of the winners. Ultimately, you profit from the trend, or at least you hope to.