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AI is significantly impacting the manufacturing sector. It is being rapidly applied to task automation and other efforts to increase efficiency. While those are positive things, they also promise to kill jobs in the manufacturing sector and beyond. At the same time, these job-killing AI stocks have the potential to create fortunes for investors.
It isn’t inconceivable that AI-powered humanoid robots could soon populate factory floors. This would create a paradox whereby some suffer from resultant job losses while others benefit from the revenues and efficiency improvements.
While you, I, and many others feel empathetic toward those who will lose their jobs, we are ultimately powerless to stop the trend. Therefore, the best course of action is to understand how to capitalize on the trend. Investing in the very stocks that will create job losses through AI is one of the best courses of action to do so.
Nvidia (NVDA)
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Nvidia (NASDAQ:NVDA) is one of the best stock investments for all things AI-related. This includes resultant job losses and efficiency increases that should ultimately create value.
Nvidia’s graphical processing units (GPUs) are the chips in highest demand for almost everything AI-related. The best way to understand this is to simply note that the majority of those chips are being sold for end use in data centers. $22.6 billion of the company’s $26 billion in first-quarter revenues came from data center sales.
That really means that Nvidia is at the heart of the massive hyperscale algorithms that are training AI overall. Those algorithms are being applied to all kinds of things, including automation tasks in the manufacturing sector.
In short, Nvidia’s GPUs are creating artificial intelligence that will be applied to manufacturing floor bots everywhere that automate away human tasks. As scary as it sometimes seems, it can make investors a fortune.
Rockwell Automation (ROK)
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Rockwell Automation (NYSE:ROK) is one of the best-known industrial automation stocks. Its shares have considerable upside potential.
The company is a particularly interesting AI firm due to the narratives it is holding out. Rockwell Automation states that it is focused on augmentation and not replacement through AI. The company is applying artificial intelligence to tasks such as predictive maintenance, quality control, and process automation. Again, the entire narrative centers around the idea that AI will augment the work of humans and not replace those jobs.
Call me skeptical, but everything the company does will require greater skill sets. While some workers will undoubtedly be able to upskill and acquire the technical and analytical skills AI will bring to automation, others won’t.
As difficult as it is to accept, the least capable workers will be let go. I’m not trying to say that investors should avoid Rockwell Automation as a result. Instead, I’m just trying to be more realistic about what will happen. Rockwell Automation will cost some people their jobs but likely create value in the process, making its stock more valuable.
Tesla (TSLA)
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Tesla (NASDAQ:TSLA) is one of the most visible AI stocks concerning job destruction. Many readers will already be aware of the company’s development of its Tesla bot. For those who aren’t, Tesla is developing a humanoid robot, the second generation of which recently debuted at the 2024 World Artificial Intelligence Conference in Shanghai.
Readers who are more interested in that bot should refer to this article. The second-generation Tesla bot has an increased walking speed of 30% and a weight reduction of 10 kg. Some analysts believe that the prototype will soon be capable of replacing human labor in several fields.
It begs the question of how the Tesla bot will be integrated into the company’s operations. Will the Tesla bot be included in the electric vehicle manufacturer’s operations or spun off as a standalone firm? No one knows the answer, so investors seeking to capitalize must assume that TSLA shares are the correct answer.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.
