Types of 3D printing stocks
A variety of options occupy different niches within the 3D printing industry. Hardware companies design and manufacture the actual 3D printers and related equipment, while materials suppliers provide the resins, metals, and polymers that form the basis of additive manufacturing.
Software and design solution providers offer tools to help customers use 3D printing. Meanwhile, service-based companies like Proto Labs and Xometry provide on-demand prototyping and other production services.
Why invest in 3D printing stocks?
There are many compelling reasons for investors to believe that now's a great time to click the buy button on a 3D printing stock.
- From healthcare to industrials, businesses across sectors are embracing 3D printing technology, creating strong growth potential.
- Investing in 3D printing stocks can provide portfolio diversification.
- As 3D printing companies continue to innovate, new applications for the technology will likely emerge.
Risks of investing in 3D printing stocks
One notable risk for 3D printing stocks is that many of them report consistent net losses. This could produce a trickle-down effect, where businesses must resort to raising capital through the issuance of equity, resulting in shareholder dilution, or the issuance of debt, which could jeopardize the companies' financial health.
Another risk is the intense competition. By some estimates, there are more than 23,000 3D printing companies operating worldwide. With a fairly low barrier to entry, it's reasonable to speculate that the field will grow even more in the coming years.
Criteria for selecting the best 3D printing stocks
When evaluating which 3D printing stocks are good fits for your portfolio, there are some things to bear in mind. For one, investors will want to see that the companies are growing revenue. Similarly, investors should look for companies that are progressing toward profitability.
Investors will also want to confirm that the companies aren't weighing down their balance sheets with debt. If 3D printing companies issue debt to raise capital, it could impede their ability to spend on research and development (R&D) and result in their lagging behind peers in innovations.
How to invest in 3D printing stocks
Understanding the technology that underlies 3D printing may be hard, but buying 3D printing stocks is easy, requiring only a few basic steps.
- Open your brokerage app: Log in to your brokerage account where you handle your investments.
- Search for the stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
Tips for investing in 3D printing stocks
Manufacturing technology is making inroads throughout the global economy by reducing production costs and localizing and speeding up order delivery for customers. As with all technology investments, however, progress won't go straight up. Expect twists and turns in these stocks as they develop new methods for designing and making products.
If you decide to invest, do so in a measured way. Maintain a diversified portfolio, be wary of stocks that benefit from investor over-optimism, and always leave spare cash to invest more during inevitable dips. Given enough time -- years and decades -- investing in 3D printing could eventually provide a big payoff.
The future of 3D printing
Pundits see a bright future for the 3D printing industry. Fortunately for those motivated to gain exposure to the burgeoning field, there are a variety of investment options to consider.
