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This Chamath Palihapitiya-Backed Robotics Stock Is Worth a Look

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Logistics robotics could be a huge long-tailed growth opportunity.

Berkshire Grey, which produces robotic devices used in logistics applications, is set to go public via SPAC merger with Revolution Acceleration Acquisition (RAAC). In this Fool Live video clip, recorded on March 15, contributors Dan Caplinger and Brian Withers discuss Berkshire Grey's business and why it could have such a long growth runway in the coming years.

Dan Caplinger: All right, so I'll jump in on Revolution Acceleration Acquisition Corp. Boy, that's a mouthful. Ticker is RAAC, I'm glad that they have. They're pre-merger and set to merge with an easier to say company named Berkshire Grey. Kind of misnomer, I'm in the Berkshires of Western Massachusetts, the company is in Massachusetts, but clear on the other side of the state. But what they are doing is using robotics systems that are artificial intelligence-enabled to help e-commerce companies fulfill their orders more efficiently.

Basically, taking out, consider an Amazon warehouse with robotic arms instead of people. You kind of get a sense of what's going on. The robots will be able to take items from a conveyor belt and put them in outbound order containers or shipping packages for direct to consumer. They can handle getting stuff to store locations for ship-to-store, as well as the direct-to-consumer model. They boast that they are able to cut operations costs for their clients up to 70%. Avoid some of the labor issues that you've heard hit Amazon and others.

Improv productivity overall, and also help with areas like inventory management and robotic parcel sorting throughout the supply chain. The SPAC shares haven't -- they went up from about $10 to $13 on the announcement. They've fallen back a bit since down to about $11 or so. It's an interesting play in robotics. It's always controversial when you're talking about, you know, there's a lot of jobs involved in order fulfillment. Replacing them with robots are sure to get some labor advocates upset. But efficiency is efficiency. It's the sort of thing that we can expect to see more of, I think, in e-commerce on forward.

Brian Withers: What's interesting, Dan, is that the labor market is actually really tight for these kinds of jobs and lots of companies are moving to look to adopt robots, especially during peak seasons. You think of during the holidays, you just can't get enough people crammed in the warehouse. It allows warehouses to flex up and flex down as needed with potentially protect their core set of employees. This is a massive market, but it's also very fragmented. My son is attending Carnegie Mellon in robotics. A couple of years ago we went to see a robotics conference, and oh my gosh, they were all sort of vendors all over the place, and everybody was hoarding big distribution systems. These guys are a little bit different in that they have some large anchor customers, like Target (TGT -24.93%) is one of them. Target's got tons of warehouses across the United States and they are only partway through filling out Target's needs. So they're going to learn more. They have a standard customer and because it's AI enabled, they're going to get more data from that and it's going to make them smarter. It will be interesting to see them execute over time. You believe that e-commerce and robots are the way to go, this looks like it's a decent deal at the SPAC price.

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