3D Printing, the Future is Today
Robert is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
A few days ago, fellow Fool blogger Ryan Cole opined that 3D printing is going to be big in the future, but may not be a good investment today. He used a fascinating chart showing how new technology propels a stock to almost ridiculous highs on inflated expectations only to have a trough of disillusionment take the stock price down to earth. Then, if the technology takes hold, the stock price begins to recover but not as strongly as its initial rise. Ryan believes this could be the case for 3D printing. That is, we may be seeing 3D printing companies riding a wave of inflated expectations and are thus at risk for a major fall into a trough of disillusionment. A major point in his post was everyday people are not going to buy 3D printers any time soon since they don't have a need for 3D printing applications. While I agree that 3D printing in the public is going to be confined to DIY types who make things like robotic snowplows (like these guys) I believe there is huge potential in industrial production that Ryan hasn't fully accounted for.
View this video from Oak Ridge National Laboratory or view this video of how Oreck vacuum cleaners is using 3D printing in its production line. Look at the complexity of the products made. Did you catch how much wasted titanium is avoided by 3D printing, or that Oreck is saving 65% on production of certain parts? The Economist magazine profiled 3D printing in manufacturing and how widespread it already is. Companies, large and small, are using titanium, plastic and stainless steel and 3D printing to make all kinds of stuff. For example, Boeing Aircraft (NYSE: BA) discovered that it can make certain aircraft parts lighter with 3D printing compared to traditional manufacturing techniques. As a result, a new F-18 Superhornet fighter jet is a bit lighter than its predecessors. General Electric (NYSE: GE) now makes its ultrasound transducers, using ceramic materials, cheaper courtesy of 3D printing. One GE engineer is flirting with the idea of printing an entire engine. All this is to say that 3D printing is alive and well and growing in the industrial/manufacturing world. This, to me, is where the big profits will be with 3D printing. Growth in the personal use/DIY market will be just the proverbial cherry on top.
The two big players in the stock market are 3D Systems (NYSE: DDD) and Stratasys (NASDAQ: SSYS). Are these stocks expensive? Yes. Are they volatile? Absolutely. Are you guarenteed a fortune investing in them now? Snort! However, I believe this is technology that is changing the manufacturing world. Both of these stocks had a "trough" of sorts in late 2011, but have come back since. Is this another run up on inflated expectations? Perhaps. But as the technology, the material science, the software expand and improve, as the cost savings add up and as the expansion of 3D printing in modern manufacturing continues, I don't think we will see the dramatic decline seen in a trough of disillusionment. Dips, yes but these may be buying opportunities. Time will tell which company will dominate, but to me, 3D printing technology is here, now, and too good to ignore.
dylan588 owns shares of 3D Systems, Stratasys, and General Electric Company. The Motley Fool owns shares of 3D Systems and has the following options: short AUG 2012 $30.00 calls on 3D Systems and short NOV 2012 $35.00 calls on 3D Systems. Motley Fool newsletter services recommend 3D Systems and Stratasys. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.