According to hedge funds, are 3D printing and additive manufacturing stocks worth buying?

We recently made a list Top 10 3D Printing and Additive Manufacturing Stocks to Buy. In this article, we take a look at how FARO Technologies, Inc. (NASDAQ:FARO) compares to other stocks in the 3D printing and additive manufacturing industry.

The additive manufacturing industry is one of the most revolutionary areas in the general and industrial manufacturing sector. Today, 3D printing has become widely used in various fields, such as medical equipment manufacturing, metalworking, home construction, and even dental surgery. Given the widespread use of 3D printing technology in various fields around the world, the 3D printing and additive manufacturing industry has become considered a high-growth area in manufacturing, and many investors are closely following 3D printing stocks and adding them to their portfolios. For example, Cathie Wood, a renowned growth investor, runs a dedicated ETF that focuses exclusively on manufacturing technology and 3D printing stocks.

Growing interest and commitment to additive manufacturing

The impact and growth potential of the additive manufacturing industry are being felt not only in markets but also at the federal government level. In 2022, the Biden administration launched the Additive Manufacturing Forward initiative to promote the use of additive manufacturing and 3D printing in the U.S. The initiative was propelled forward by the profitable and attractive applications of 3D printing. For example, General Electric’s use of additively manufactured fuel nozzles in commercial aircraft engines was cited by the White House as the reason its fuel nozzles achieved a 30% cost saving while being 25% lighter and five times more durable than conventional fuel nozzles.

It’s not just the government that is interested in 3D printing companies and technologies. Many tech companies are also introducing products in the 3D printing and additive manufacturing space to make their presence felt in this space. Microsoft has developed and introduced the 3D Builder application and also has its own 3D printers in the market. Autodesk is known for its Autodesk Fusion, a key tool for preparing 3D models for printing. Finally, HP is known for its Multi Jet Fusion 3D Printing technology, among other products in this space.

Some may argue that the additive manufacturing industry is lagging behind other areas of the market. However, a closer look at the performance of individual stocks in the industry highlights the fact that many of them are doing well fiscally and could be considered good investments today.

The story continues

Given the potential for high growth in 3D printing stocks in today’s market, especially in light of the growing use of additive manufacturing across a variety of industries, we’ve compiled a list of the best 3D printing and additive manufacturing stocks to buy now. You can also take a look at the best 3D printing companies in the US and what happened to 3D printing stocks?

Our methodology

We’ve selected the top holdings in Cathie Wood’s 3D Printing ETF and sorted them in ascending order by the number of hedge funds that own them, using Insider Monkey’s Q1 2024 hedge fund data.

Why are we interested in the stocks that hedge funds invest in? The reason is simple: Our research has shown that we can beat the market by mimicking the top stock picks of the top hedge funds. Our quarterly newsletter strategy selects 14 small- and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (See more details here.)

A worker uses a laser projector to create a plan of a large room.

FARO Technologies, Inc. (NASDAQ:FARO)

Number of hedge fund holders: 24

FARO Technologies, Inc. (NASDAQ:FARO) is a software company headquartered in Lake Mary, Florida that provides software-based support for 3D measurement, imaging and execution solutions.

The company is a strong competitor in the 3D printing space and has been steadily expanding its reach in the industry through numerous acquisitions. FARO Technologies, Inc. (NASDAQ:FARO) has made 17 acquisitions to date, most of which have been in the 3D scanning space. Analysts are quite bullish on the stock in light of its first-quarter earnings, with revenue coming in at $4 million and statutory losses of just $0.38 per share, which fell well short of analyst estimates.

During the first quarter, 24 hedge funds held long positions in FARO Technologies, Inc. (NASDAQ:FARO), with the total value of the shares being held being $131.6 million.

Total FARO takes 6th place on our list of the best 3D printing stocks and add-ons to buy. You can visit Top 10 3D Printing and Additive Manufacturing Stocks to Buy to see other 3D printing and additive stocks that are on the hedge fund radar. While we recognize FARO’s potential as an investment, our belief is based on the belief that AI stocks are more promising in terms of delivering higher returns and doing so in a shorter time frame. If you’re looking for AI stocks that are more promising than FARO but are trading at less than 5 times earnings, check out our report on cheapest AI action.

READ MORE: Analyst sees new $25 billion ‘opportunity’ for NVIDIA AND Jim Cramer Recommends These 10 Stocks for June.

Disclosure: None. This article was originally published on Insider Monkey.