Last month, we posted a video that analyzed many of the 3D printing stocks that we cover, asking a very fundamental question: Are they worth the risk? The short answer: Not really. The longer answer is more nuanced. The original investment thesis – a 3D printer in every home – just never happened. That sent us looking at different niche themes within the broader industry. Metal 3D printing stocks have left behind a bunch of broken promises. 3D bioprinting may sound super cool but when all of the founders of a leading player in the space suddenly split, it’s time to reassess that thesis as well.
We thought we had finally landed on the perfect pick-and-shovel play on 3D printing – companies focused on manufacturing on demand, also known as distributed manufacturing, which connects buyers needing custom parts with a network of suppliers through a digital platform. These on-demand manufacturing services include not just 3D printing but CNC machining, injection molding, and sheet metal fabrication, among other manufacturing methods. For a while, we were bullish on the distributed manufacturing theme, opening positions in both Protolabs stock and Xometry stock. We eventually dropped the former after revenue growth stalled, followed by the latter after reassessing the upside of its “high mix, low volume”