From Nvidia to Figure: Robotics Stocks Poised for the Next Boom

The world of robotics is on the verge of a significant transformation, with physical AI agents emerging as a rapidly growing market.

According to Audun Wickstrand-Iversen, a portfolio manager at DNB Asset Management, this sector is no longer just a futuristic concept but a burgeoning growth area. Wickstrand-Iversen compares the current phase of robotics development to the industrial revolution of the 19th century. He emphasizes that todays revolution involves integrating language models and AI software into humanoid platforms that can operate in the physical world. Nvidia is at the forefront of this technological shift. The company's Jetson platform for edge computing and the Isaac Sim simulation environment have positioned Nvidia as a key player in setting industry standards.

Wickstrand-Iversen notes that Nvidia's technology is becoming a long-term benchmark for hardware manufacturers, software providers, and system integrators. The potential for increased production of autonomous systems could make licensing and service revenues a highly profitable component of the industry. Tesla, for instance, is pursuing a dual strategy. The company is developing its humanoid robot, Optimus, and initially deploying this technology within its factories. This approach allows Tesla to conduct real-world tests and gather valuable data. If successful on a larger scale, Tesla could expand its role beyond the automotive sector into industrial automation. Amazon is another major player in the automation field. The company has developed a vertically integrated supply chain with warehouse robots, autonomous vehicles, and drones. This integration has enabled Amazon to extend its Prime Same-Day delivery service to over 4,000 cities and towns, showcasing its logistical advantage.

An exciting newcomer to the scene is the US startup Figure. Their humanoid robot, Figure 02, combines proprietary hardware with language models and computer vision. With backing from investors like Microsoft and Jeff Bezos, Figure is well-positioned financially. Wickstrand-Iversen suggests that if Figure can demonstrate productivity, the barriers to entry for competitors could be substantial.

In Europe, companies like Neura and 1X are making strides. Neura's modular robot, MAiRA, offers open architecture for enhanced security and interoperability. 1X aims to introduce humanoid robots to the mass market at the price of a mid-range car, supported by a $100 million funding round with investors such as OpenAI and EQT Ventures. Chinese company Unitree is aggressively entering the market with models like the H1 and G1, priced from $16,000. These platforms boast impressive specifications, but their practical application remains uncertain.

Boston Dynamics, known for its robots like Spot and Atlas, has transitioned from a research lab to a commercial system provider. These robots are already used in niche markets such as security and inspection, though high costs and limited production keep the business focused on specialized areas.

SoftBank plays a dual role as both an investor and provider. With products like Pepper and Whiz, SoftBank is active in operations while also holding stakes in key companies, allowing it to benefit multiple times from market growth. For investors, the challenge lies in distinguishing between platform providers and niche players.

Companies like Nvidia, Tesla, and Figure have the potential to generate scalable service revenues, similar to ecosystems in the smartphone market. In contrast, companies like Boston Dynamics may secure stable margins in niche markets. The robotics market is expected to grow at a double-digit rate in the coming years. As the robotics industry continues to evolve, the opportunities for investors and companies are vast. The integration of AI into physical agents is not just a trend but a pivotal shift that could redefine industries across the globe.