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You’ve made the first move, and you’re already a step ahead. And today it’s going to start paying off.
Earlier this week, we established that artificial intelligence is beginning to leave the data center and enter the physical world.
Yesterday, we looked at why businesses are investing billions of dollars in robotics… not because it’s futuristic, but because it improves productivity, lowers costs, and helps solve labor shortages.
Today, I’d like to look at the opportunity from an investor’s perspective.
Whenever a new technology captures Wall Street’s attention, investors naturally focus on the company building the finished product. During the smartphone revolution, everyone wanted to own Apple (AAPL).
Today, much of the excitement in robotics surrounds companies like Tesla (TSLA) and Figure AI. There’s nothing wrong with that. They’re doing incredible work.
But after nearly 25 years of investing (and despite what you may have heard), I’ve learned that some of the biggest opportunities are often found one step behind the headlines.
They’re found throughout the supply chain.
Think about the human body for a moment. Your brain processes information. Your eyes see the world around you. Your muscles create movement, while your nervous system connects everything together.
A humanoid robot works much the same way. It needs processors to think, cameras and sensors to see, actuators and motors to move, batteries to provide energy, and sophisticated software to coordinate every action. Remove any one of those systems and the robot simply doesn’t work.
That’s why I don’t think of robotics as a single industry.
I think of it as an ecosystem.
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The robot may capture the headlines.
But the companies supplying every robot may ultimately capture the biggest profits.
Understanding that ecosystem is one thing. The next question is whether it’s actually becoming large enough to create meaningful investment opportunities.
I believe the answer is yes, and Wall Street is starting to catch on.
One of the more interesting research reports I’ve read recently came from Goldman Sachs. The firm argued that the next major AI investment theme is beginning to shift away from computing infrastructure and toward Physical AI (good on them for reading the First Move!), the combination of artificial intelligence, robotics, and intelligent automation operating in the real world.
That doesn’t mean data centers, GPUs, or AI chips suddenly become unimportant. It simply means the market is beginning to look beyond the first phase of the AI revolution and ask what comes next.
That’s the right question.
One place where that next phase is already becoming visible is China. The country has quietly spent years building one of the world’s deepest robotics manufacturing ecosystems. Government support, lower production costs, and a highly integrated supply chain are allowing Chinese companies to accelerate commercialization much faster than many investors expected.
Nothing illustrates that enthusiasm better than Unitree Robotics. The company will be the first publicly traded humanoid robot manufacturer in China, debuting at roughly a $9 billion valuation based off current indications.
Demand is extraordinary, with the retail portion of the IPO reportedly oversubscribed by more than 8,000 times.
Whether Unitree ultimately becomes the long-term winner isn’t really the point. To me, it’s another sign that investors are beginning to recognize robotics as the next major phase of AI.
The long-term forecasts are even more impressive. Morgan Stanley recently raised its estimate for Chinese humanoid robot shipments in 2026 from 28,000 to 50,000 units, and now expects annual production to climb to roughly 446,000 robots by 2030 as manufacturing scales and costs continue to decline.
When I see forecasts calling for hundreds of thousands of humanoid robots, I don’t just see the bucket of bolts with a smile painted on…
I see millions of cameras, sensors, electric motors, actuators, precision gears, batteries, processors, and countless other specialized components that will have to be manufactured every single year.
Every robot that rolls off an assembly line creates demand throughout the entire Physical AI ecosystem.
That’s why I think many investors are asking the wrong question. Instead of trying to identify the one company that builds the winning humanoid robot, I’d rather identify the companies supplying every robot that’s built. Whether the eventual winner is Tesla, Figure AI, Unitree, AgiBot, or another company we haven’t even heard of yet, they’ll all rely on many of the same underlying technologies.
We’ve seen this story play out before. When smartphones changed the world, Apple deserved much of the attention. But some of the best long-term investments came from companies quietly supplying chips, sensors, cameras, connectors, and other critical technologies to the entire industry.
They didn’t need to know which phone would dominate. They benefited from the growth of the entire ecosystem.
Robotics has the potential to follow that same path.
Tomorrow, we’ll zoom in on one of those layers that almost nobody is talking about today, but one that could become one of the biggest bottlenecks in the entire Physical AI revolution.
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