IRBT, RR stocks surge on hopes Trump will boost robotics industry
After Americans had soured on Bidenomics due to rising inflation, creating what economists referred to as a "vibecession," Donald Trump won a second term in the White House largely because voters trusted his ability to drive economic growth in the country.
But as Trump's first year back in office comes to a close, the confidence people had in is handling of the economy appears to be waning, as Americans grow concerned about rising unemployment, sticky inflation and a sense that affordability continues to be a problem.
Nonetheless, even if a growing number of Americans are having doubts about the economy, the so-called "Trump Bump" still seems to be alive and well when it comes to investors.
Whether its AI and semiconductors, nuclear energy, cryptocurrencies, drones or rare earth materials, anytime there has been a signal that Trump will be putting the weight of the presidency behind a specific industry, the stocks in these various sectors have surged.
And so it was the case on Wednesday when a report in Politico indicated that the Trump administration is now turning its attention to the robotics industry.
According to the report, Commerce Secretary Howard Lutnick has been meeting with CEOs of companies in the robotics industry to discuss the White House's plans, indicating that he is "all in" on helping ramp up development of the technology in the United States.
Central to the administration's plans is Trump potentially issuing an executive order to accelerate development of robotics sometime next year, Politico reported.
“We are committed to robotics and advanced manufacturing because they are central to bringing critical production back to the United States," a spokesperson for the Commerce Department said in a statement.
Competition with China could drive political support
Trump has issued a number of executive orders this year, including ones for nuclear energy, artificial intelligence, cryptocurrencies and rare earth materials. Each one of these orders moved stocks higher.
And on Wednesday, news of a potential executive order next year tied to the robotics industry was enough to send stocks in the sector soaring.
Shares of iRobot Corporation (IRBT) surged nearly 74%, while Richtech Robotics (RR) gained 18.5%. Even Tesla (TSLA), which is designing its Optimus humanoid robot, rose 4.1%.
Politico noted that the Department of Transportation is planning to announce a working group on robotics by the end of the year, although a spokesperson for the department did not comment on whether this was true.
There also appears to be interest in Congress to accelerate robotics manufacturing in the US, as Republicans had tried to include an amendment to the National Defense Authorization Act this year that would've created a national robotics commission. However, the amendment did not appear in the final bill.
Similar to how it's been with rare earth manufacturing, one thing that might drive up political support behind robotics is a push to catch up with China.
According to the International Federation of Robotics, China had about 1.8 million industrial robots inside its manufacturing facilities by 2023, about four times that of the United States.
Goldman Sachs estimates that the global market for humanoid robots could reach $38 billion by 2035.