These Automation Stocks, ETFs Are Poised To Benefit From Biden's Boost To Manufacturing

According to Deloitte, the manufacturing sector faces a widespread shortage of skilled labor.

Last year, three-quarters of manufacturing executives surveyed by the National Association of Manufacturers showed that "attracting and retaining a quality workforce" is “a primary business challenge."

Some 83% of manufacturers quoted in the report said they believed smart factory solutions "will transform the way products are made in five years."

The Biden administration’s ongoing effort to bolster U.S.-based manufacturing and impose tariffs puts the automation industry in a strategic position to cut costs to remain competitive.

And automation combines emerging technologies in two distinct sectors: artificial intelligence (AI) and robotics. Some of the most prominent plays in this regard include:

• NVIDIA Corp NVDA
• Qualcomm Inc QCOM
• Microsoft Corp MSFT
• Alphabet Inc Class C GOOG. 

Among the automation stocks to watch, include:

• Rockwell Automation Inc ROK is one of the biggest and oldest names when it comes to companies developing automation tools for industrial production. The market, however, didn't respond well to a Q2 earnings call earlier this month, with several analysts lowering its price target.
• Teradyne Inc. TER is focused on automating testing equipment for various industries including semiconductors. The company's stock has climbed almost 40% in the past month, and Goldman Sachs upgraded its rating to Buy earlier this week.
• Amkor Technology Inc. AMKR provides packaging technology for the semiconductor sector. The company announced Thursday it plans to invest $2 billion in a new packaging and testing facility in Arizona.
• Global X Robotics and Artificial Intelligence ETF BOTZ is the largest ETF covering artificial intelligence and automation, by assets under  management. It's followed by Global X Artificial Intelligence & Technology ETF AIQ and iShares Robotics and Artificial Intel Multisector ETF IRBO.

In the U.S., several new efforts have sprouted to re-localize key industries domestically, most notably for semiconductors as well as electric vehicles (EVs) and green energy.

The Biden administration continues to push legislation meant to give domestic manufacturing a boost. The 2021 Infrastructure Investment and Jobs Act, for example, allocated $1.2 trillion into construction, transportation, clean energy and digital infrastructure. 

There was also the Creating Helpful Incentives to Produce Semiconductors And Science (CHIPS) Act, which put $280 billion to work on regaining the lead on developing and building semiconductors — widely regarded as the most important commodity of decades to come. 

Now Read: EXCLUSIVE – Investing In AI? Diversify ‘Beyond The Likes Of NVIDIA’ Says WisdomTree’s CIO

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