The market uncertainty this year over tariffs and trade has hit markets hard. It’s been especially hard to tech stocks, which have largely been leading markets higher over the past few years.
While the rollout of AI is starting to look like it may slow down, rising tariffs and trade could mean that another key trend accelerates. That trend? Automation. From AI software to advances in robotics, automation trends could move higher to circumvent today’s uncertainty.
That may be why shares of Rockwell Automation (ROK) jumped following their strong earnings beat on Wednesday. Rockwell was able to raise their guidance at a time when many companies are lowering their guidance or removing it entirely.
Shares of Rockwell are now flat over the past year. The earnings beat also turns the company’s operations positive over the last 12 months, compared to a slight drop in revenues and earnings.
Action to take: Following their earnings beat, Rockwell shares are back into rally mode following a steep selloff earlier this year. It’s likely the trend will continue in the months ahead, albeit at a slower pace. Momentum investors may like shares here.
At current prices, Rockwell also pays a 2.1% dividend.
For traders, the August $310 calls, last trading for about $9.90, could see mid-double-digit returns from a further trend higher over the next three months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.