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Why Fastbrick Robotics Ltd (ASX:FBR) shares rocketed higher today

One of the best performers in morning trade has been the Fastbrick Robotics Ltd (ASX: FBR) share price.

At the time of writing the robotics company’s shares are 9% higher to 18.5 cents.

Why are Fastbrick Robotics’ shares surging higher today?

Investors have reacted positively to an announcement out of Fastbrick Robotics this morning relating to the signing of a strategic collaboration agreement (SCA) with a Mexican developer.

According to the release, the company has signed a two-year deal with GP Vivienda that will see the two parties contemplate pilot testing programs for the Hadrian X bricklaying robot in Mexico.

In addition to this, the SCA will investigate future applications of Fastbrick Robotics’ Dynamic Stabilisation Technology.

What is GP Vivienda?

GP Vivienda is the housing division of Mexico’s Grupo GP, one of the largest construction companies in the country, and has built over 70,000 homes across Mexico.

This includes master-planned communities which feature schools, community centres, parks with playgrounds, and commercial areas.

According to research done by EY Parthenon on behalf of Fastbrick Robotics, analysis of the construction market in Mexico indicates a theoretical demand of approximately 700-750 Hadrian X construction robots. As such, this certainly could be a lucrative opportunity in the future if all goes to plan.

Should you invest?

While I think that Fastbrick Robotics is an exciting company with technology that could disrupt the construction industry, it is still a little too soon for an investment for me.

At the moment the company has a lot of memorandum of understandings (MOUs) and agreements, but nothing meaningful in respect to revenue.

If these MOUs and agreements lead to sales of its technology then its share price would deservedly rocket higher from here, but until that happens I’m going to sit this one out and focus on other exciting tech companies such as Appen Ltd (ASX: APX) and Altium Limited (ASX: ALU).

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Altium and Appen Ltd. 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. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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