The last couple of years have proven that automation isn’t immune to larger macroeconomic cycles, as many companies have pulled back on their spending in the face of weaker demand and greater uncertainty. That has made life difficult for Cognex (Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving ...

The last couple of years have proven that automation isn’t immune to larger macroeconomic cycles, as many companies have pulled back on their spending in the face of weaker demand and greater uncertainty. That has made life difficult for Cognex (Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving ...

Global Automation The Long View: Robotics -- Physical AI and the next phase of industrial Robot Renaissance Jay Huang, Ph.D. +852 2123 2631 jay.huang@bernsteinsg.com Weibin Liang, Ph.D. +852 2123 2666 weibin.liang@bernsteinsg.com Dien Wang, Ph.D. +852 2123 2622 dien.wang@bernsteinsg.com Robotics is a frontier of physical AI. For industrial robots, there has been a notable inflection in adoption — a renaissance — since around 2020 (Exhibit 4). Most recently, the progression of AI is ushering this Robot Renai ...

Core Insights - Cognex Corporation (NASDAQ:CGNX) is recognized as one of the 14 Best Mid-Cap Dividend Stocks to Buy Now [1] - Barclays has adjusted its price target for Cognex to $54 from $56 while maintaining an Overweight rating, citing strong demand in industrial technology sectors [2] Group 1: Product Development and Market Position - Cognex has launched its first lineup of Solutions Experience (SLX™) devices aimed at addressing common challenges in major industrial verticals [3] - The initial SLX devices focus on logistics, designed for both new automation facilities and as add-ons for existing automated systems, featuring reliable barcode reading and AI-powered item detection [4] - Future plans include expanding the SLX lineup with more AI-driven, user-friendly devices tailored to specific automation needs, aiming to reduce total cost of ownership (TCO) and enhance overall equipment effectiveness (OEE) [5] Group 2: Industry Outlook - The industrial technology sector is experiencing strong demand trends in key markets such as data centers, factory automation, electronics, test and measurement, and semiconductors, which supports a positive outlook for Cognex [2]

on 22-Jan-2026 LONG VIEW 22 January 2026 Global Automation The Long View: Robotics -- Physical AI and the next phase of industrial Robot Renaissance Jay Huang, Ph.D. +852 2123 2631 jay.huang@bernsteinsg.com Weibin Liang, Ph.D. +852 2123 2666 weibin.liang@bernsteinsg.com Dien Wang, Ph.D. +852 2123 2622 dien.wang@bernsteinsg.com Robotics is a frontier of physical AI. For industrial robots, there has been a notable inflection in adoption — a renaissance — since around 2020 (Exhibit 4). Most recently, the progr ...

Core Viewpoint - Cognex Corporation (NASDAQ:CGNX) is recognized for its strong performance and potential in the machine vision market, despite a cautious outlook from Truist for the industrial sector in 2026 [2][3]. Financial Performance - In Q3 2025, Cognex reported revenue of $277 million, reflecting an 18% increase year-over-year [4]. - The operating margin was 20.9%, and the adjusted EBITDA margin improved to 24.9%, marking a 730 basis point increase from the previous year [4]. - Net income per diluted share was $0.10, while adjusted diluted EPS reached $0.33, a 69% increase from the prior year, indicating the fifth consecutive quarter of earnings growth [5]. - Operating cash flow improved to $87 million, up from $56 million in Q3 2024 [5]. Shareholder Returns - The company returned $37 million to shareholders during the quarter, exceeding 100% of free cash flow over the past twelve months [6]. Product Development - Cognex launched its Solutions Experience (SLX) product portfolio in Logistics, which integrates AI-enabled vision applications into a growing logistics market [6]. Market Position - Cognex is a leading provider of machine vision systems, software, sensors, and industrial barcode readers utilized in manufacturing and automation globally [7].

Core Insights - The Mairs & Power Growth Fund reported a 7.99% gain in Q3 2025, closely aligning with the S&P 500 Total Return Index's 8.12% and outperforming the Morningstar Large Blend index's 6.93% [1] - Year-to-date, the fund is up 10.12%, trailing the S&P 500 TR at 14.83% and the peer group at 13.06% [1] Company Insights - Cognex Corporation (NASDAQ:CGNX) is highlighted as a key investment, providing machine vision products that automate manufacturing and distribution tasks [2][3] - Cognex's stock had a one-month return of 2.32% and a 52-week gain of 0.53%, with a market capitalization of $6.354 billion as of December 10, 2025 [2] - The company reported Q3 2025 revenue of $277 million, an 18% year-over-year increase, or 16% on a constant currency basis [4] Industry Insights - The machine vision field has seen significant advancements due to AI, enabling systems to operate reliably in real-world conditions, which is expected to accelerate adoption in the coming years [3] - Cognex is positioned to benefit from the trend of manufacturing onshoring in the U.S. and the increasing demand for factory automation [3]

Company Overview - Cognex is a pure-play machine vision company specializing in embedded software, high-speed cameras, and machine vision systems for factory automation and logistics [2][3] - The company has a global footprint, with approximately 40% of its business in the Americas, 20% in Europe, and 40% in Asia [3] Industry Position - Cognex positions itself as a technology leader in the machine vision space, emphasizing its expertise and innovation in the industry [3]

Cognex Conference Call Summary Company Overview - **Company**: Cognex - **Industry**: Machine Vision - **Headquarters**: Natick, Massachusetts - **Market Presence**: 40% in the Americas, 20% in Europe, 40% in Asia - **Total Addressable Market (TAM)**: Approximately $7 billion with a growth rate in the low- to mid-single teens [3][4] Core Business and Financials - **Business Model**: High-margin, capital-light with less than 2% of revenue spent on Capex annually - **Historical EBITDA Margin**: 28% [5] - **Customer Base**: Traditionally focused on large, sophisticated companies like Amazon and major consumer electronics firms [4] Strategic Objectives 1. **AI Leadership**: Aim to be the number one leader in AI technology and machine vision, building on a legacy of rules-based software with AI-based tools [7][8] 2. **Customer Count Doubling**: Target to double the customer base by expanding beyond large customers to a broader market [9][10] 3. **Customer Experience**: Focus on being the number one in customer experience to retain customers and increase wallet share [9][10] Sales and Marketing Strategy - **Sales Force Transformation**: Merging different sales organizations to improve efficiency and drive customer acquisition [13][14] - **Emerging Customer Initiative**: Launched in 2023 to increase sales capacity and reach broader customer segments [11][12] - **Product Development**: Emphasis on creating easy-to-use products and guided workflows for less sophisticated customers [18][19] Financial Performance and Growth Projections - **Customer Growth**: 10% increase in customer count year-over-year, with expectations for acceleration [29] - **Revenue Growth Framework**: Targeting 10%-11% organic growth, with 4% from market growth and 6%-7% from additional penetration [29][30] - **Profitability Goals**: Aiming for greater than 20% profitability in Q4, with a focus on cost management and operational efficiency [40][42] Market Insights - **Consumer Electronics**: Positive outlook due to supply chain diversification and new product launches [44][45] - **Logistics**: Strong growth expected due to low automation rates and ongoing demand for automation solutions [51][52] - **Packaging**: Stable growth anticipated with opportunities for AI-driven inspection solutions [55][56] - **Automotive**: Stabilizing market after declines, with potential for recovery in 2026 [60][61] - **Semiconductor**: Positive outlook with expected growth in the second half of 2026 [63][64] AI Integration and Competitive Positioning - **AI Features**: All new products launched since 2022 include AI components, enhancing capabilities for complex inspections [65][66] - **Differentiation**: Cognex focuses on high accuracy, speed, and scalability, leveraging proprietary vision models to outperform generic AI solutions [70][71] Conclusion - **Market Share**: Cognex holds a mid-teen percentage of the fragmented machine vision market, with potential for growth through organic expansion and M&A [77]

Core Insights - Cognex positions itself as a technology leader in the machine vision sector, which is a subsegment of factory automation [2][3] - The company has been shifting towards a direct sales approach over the past few years, broadening its customer base [3] - Cognex differentiates itself through its software capabilities and enhanced customer experience, contributing to attractive growth and strong profit margins [3]