UBS Group AG: The wave of investment in warehouse automation is gathering momentum, and Cognex (CGNX.US) is expected to become a big winner.

UBS Group AG's latest survey data from UBS Evidence Lab shows that global warehouse automation spending is expected to accelerate due to technological advancements and rising labor costs. The survey results indicate that automation equipment suppliers will have significant opportunities, with machine vision company Cognex (CGNX.US) set to be a major beneficiary. The sixth global warehouse automation business survey conducted by UBS Group AG covered 130 decision-makers in North America, Europe, and the Asia-Pacific region. The results show that nearly two-thirds of respondents plan to increase capital spending on warehouse and distribution centers in the next year, with an average budget increase of 5%. Retailers and e-commerce companies lead in short-term spending intentions, but wholesalers and manufacturers seem more optimistic about the prospects over the next three years. UBS Group AG analyst Damian Karas stated that the warehouse automation sector continues to show structural growth, with the market not yet saturated. He predicts a large wave of automation investments by the end of this decade. Accelerated demand for machine vision The survey shows a strong momentum in the development of advanced machine vision technology, which is crucial for automated operations such as barcode reading, quality inspection, and item recognition in logistics environments. Over half (56%) of respondents expect to increase investment in machine vision tools next year, a rise from previous survey results. While 62% of respondents have adopted some form of image-based barcode scanning, only 36% of warehouse spaces use advanced machine vision technology, indicating significant room for expansion. Leaders in the machine vision field, Cognex was rated as the preferred supplier for future deployments. Datalogic and Zebra Technologies Corporation Class A are still the most widely used machine vision and barcode scanning suppliers, with Zebra Technologies Corporation Class A maintaining a strong position in the mobile Siasun Robot & Automation sector. Widespread use of mobile Siasun Robot & Automation Mobile Siasun Robot & Automation, especially autonomous mobile Siasun Robot & Automation (AMR), is rapidly gaining popularity as companies seek flexible automation solutions to avoid high fixed infrastructure costs. Up to 91% of respondents reported using or planning to use mobile Siasun Robot & Automation, a significant increase from previous surveys. Among AMR suppliers, Honeywell International Inc.'s Intelligrated business ranks at the top in customer consideration, while Zebra Technologies Corporation Class A's Fetch Robotics ranks at a moderate level. European automation companies continue to dominate market penetration rates, but the rise in Intelligrated's position suggests increasing competitiveness of American suppliers. Karas stated that the increasing use of AMR is due to its flexibility, noting that companies seek automation that does not require fixed floor installations. Stocks worth watching UBS Group AG believes that the survey overall supports stocks in the warehouse automation sector, especially Cognex, as the company holds a leading position in machine vision supplier evaluations. Zebra Technologies Corporation Class A demonstrates strong brand strength in barcode scanning and mobile Siasun Robot & Automation, while Symbotic (SYM.US) seems to be struggling, performing the worst among potential new suppliers. Honeywell International Inc. has mixed performance: while its adoption rate has declined compared to previous surveys, there is an increase in future customer demand for its automation and AMR products. Karas noted that while Honeywell International Inc. sees encouraging signs in the warehouse automation sector, the segment still accounts for a relatively small portion of its overall business. Honeywell International Inc. announced a significant restructuring plan this year, planning to split itself into three independent publicly traded companies focusing on automation, aerospace, and advanced materials. The plan is expected to be completed by mid-2026, aiming to streamline operations and strengthen each business's strategic focus. Rising wave of automation While companies are willing to increase investment, UBS Group AG states that automation applications in the industry are still limited, leaving ample room for future development. UBS Group AG estimates that by 2030, rising labor costs, AI optimization, and e-commerce logistics demands will continue to drive investment. The survey also indicates a growing interest in AI-based warehouse layout optimization tools and digital twin technology, with Intelligrated receiving high ratings from respondents evaluating these advanced solutions. Overall, UBS Group AG has a positive outlook on the warehouse automation industry, particularly favoring companies with strong positions in high-growth segments such as machine vision and mobile Siasun Robot & Automation, such as Cognex and Zebra Technologies Corporation Class A.