The $255 Billion AI Opportunity Nobody's Talking About (3 Stocks to Buy)

There's a tiny piece of metal, smaller than a coin, and OpenAI just told hardware suppliers they can't build a robot without it. It's not the battery, it's not the chip, it's not even the motor, and Wall Street thinks demand for it is about to go off in a big way. I'm talking about more than $250 billion big. So, today I'm showing you the research, the actual deals, and the production numbers behind this trend, plus three stocks that could be positioned to benefit. So, you're going to want to pay attention. Hi, I'm Jacob Wade. I'm a financial coach that helps high-income earners retire early. And if you like timely financial news videos just like this one, hit the thumbs up button below. It lets me know to keep making more videos just like this one. So, that tiny piece of metal that I talked about, it's bearings. Those little rings of metal and steel balls that let a rotating part spin smoothly instead of grinding itself apart. Now, every motor in a robot needs at least one. So, as robots get more complex, the number of bearings inside them multiplies. A simple drone might only need eight to 12, while a humanoid robot with dozens of joints needs 70 or more of these. And those bearings add up to big dollars. $255 billion is how big Morgan Stanley thinks the global robot bearings market will be worth by 2050, up from around $800 million today. So, that's roughly 300 times growth. And Morgan Stanley isn't the only one saying it. Nomura and UBS have both published research this year pointing to the same fast-scaling humanoid robot ramp. And independent research firms who track this market year-round, separate from any bank's trading desk, back it up with their own numbers. One sizes the robot bearings market at roughly $9.8 billion in 2024, growing to nearly $17.8 billion by 2031. Now, another focused specifically on precision bearings for industrial automation has that segment roughly doubling from about 5.2 billion this year to 9.7 billion by 2035. And it calls out humanoid robots by name as the fastest growing use case. Now, as you can see, the exact numbers move depending on how each firm defines the market, but the point I'm making here is multiple independent shops that make their living forecasting this specific industry are all pointing in the same direction. And by the way, real quick, finding these types of hidden news stories and keeping a pulse on the market is exactly what Steve Reitmeister, our editor-in-chief here at WallStreetZen, walks through in his free Monday training sessions at 7:00 p.m. Eastern. So, if you want to join the next one, you could sign up for free at wallstreetzen.com/live or just scan the QR code on the screen right here and register for free. Now, here's why this story is on the verge of accelerating. Earlier this year, OpenAI published a request for a proposal, an RFP, seeking US-based beneficiaries across three different categories: consumer devices, data centers, and robotics. Now, inside the robotics section of the RFP, OpenAI names six specific inputs it considers critical: actuators for robot applications, precision bearings, harmonic drives, gearboxes and motors, permanent magnets, and power electronics. As you can see, precision bearings are right there on that list, and I pulled the actual document myself to confirm it rather than just relying on a second-hand summary. So, the data shows this is actually happening. And it didn't take long for the market to take notice. The same day the RFP went public, shares of Symbotic, a warehouse robotics company, moved higher in a single session. Now, it wasn't a massive move on its own, but that's kind of the point. Traders reacted the same day before most investors even connected the bearings piece to the robotics trade. Now, I'm not saying go invest in Symbiotic. It actually holds a Zen rating of a C, which is just a hold recommendation. So, I'm not really going to spend too much time on that specific stock in this video. But, I do want to share with you three stocks that I unearthed that I believe could benefit from this rapidly accelerating trend. Now, I'm going to share those three in a minute, but before I do, I think it's really important that I address how real this demand is. So, what's important about all this is it really only matters if robots are actually getting built because more robots line means more bearings going into them. So, here's a few points to show that that demand is actually very real. First, Tesla has been converting its Fremont plant to build Optimus and supply chain reporting points to weekly production climbing from dozens of units in June to a target of around 1,000 units per week by September. Plus, a second dedicated factory in Texas expected to add more capacity by 2028. Every single one of those units needs dozens of bearings before it leaves the factory floor. And in China, Unitree just got approved for its IPO on Shanghai's STAR Market, a sign that investors are ready to fund the next leg of production at scale. Now, BYD, the Chinese EV and battery giant that now outsells Tesla in some quarters, says it plans to deploy up to 20,000 robots internally by year end. And one industry estimate actually puts total humanoid robot shipments in China alone at 40 to 50,000 units this year. That's tens of thousands more robots, each one needing, guess what? Joints, motors, and yes, bearings. And private funding is following this, too. Robotics company Neura Robotics closed a 1.4 billion with a B funding round, capital that flows straight into scaling up production and the components that go with it. So, if you put all of that together, you've got real factories converting production lines, you've got real IPOs getting approved and real capital flowing in, and all of that demand has been moving through the same supply chain that we've been talking about this whole video. Not just a research note projecting out to 2050, this is actually happening. Now, once again, I want to point out there are some fundamental issues with some of the names that I just discussed. Tesla only earns a C or a hold recommendation from our system. Unitree hasn't IPO'd yet, and IPOs in general can be kind of risky. So, I want to share with you something real that you can actually take on action now, and share three companies that could be seriously set up to be beneficiaries as this trend continues. Now, remember I'm presenting real stocks and data, but any investment decisions you make are yours and yours alone, so always do your own due diligence. All right, stock number one is Moog Inc., ticker symbol MOG.A. Now, Moog is one of the world's leading designers of precision motion control, which are the actuators and servo systems that combine motors with embedded precision bearings to create controlled, repeatable movement. And that is already the exact problem that robotics engineers are trying to solve at every single joint, and Moog's been solving it for aerospace and industrial automation for decades already. And the numbers back it up here. Moog's trailing 12-month earnings came in at $286.9 million, up 35.6% year-over-year, one of the fastest growth rates of any stock in this entire video that I'm sharing. And that growth is only accelerating, not slowing down. Last year's pace actually outran the company's longer-term average, which is a sign that there's still more room to run from here. Now, only one analyst currently covers Moog in our data, so take this as sort of directional rather than full consensus, but that analyst recommends it as a strong buy with significant projected upside in just the coming year. Now, let's run through the actual Zen rating. Here's an overall grade of an A, equivalent to a strong buy recommendation. This is the result of a 115 factor fundamental review, and that A grade indicates that the stock has passed this review with flying colors, landing in the top 5% of stocks tracked. Now, each overall Zen rating is made up of seven underlying component grades that let you see a stock's specific strengths and or areas of softness. So, let's actually take a look at those. For Moog, the financials score is a B, or top 13% of all stocks tracked, pointing to a genuinely healthy balance sheet. But, momentum is the standout here at an A grade. It's in the top 4% with an extremely strong tailwind behind it, indicating the stock's price trend is continuing to outperform almost everything else out there right now. Now, there is one big risk I'm going to flag here. A big chunk of its revenue still comes from aerospace and defense programs, and a slowdown in government or defense spending could weigh on the stock, regardless of how this robotics story plays out. But still, a company already growing earnings this fast with this much price momentum heading into a robotics supply crunch, that is a strong place to start. And real quick, if you're getting any value from this, consider subscribing to the channel. We do this kind of grounded, data-driven research every single week, and I'd love to have you back for the next one. All right, let's go on to the next stock pick. All right, next up is CTS Corporation, ticker symbol CTS, and this one has about the most direct connection you'll find outside of actual bearings maker. Now, CTS builds sensors, actuators, and motor control electronics, and when the company unveiled the newest motor control platform, it specifically named robotic applications as the target market in its own announcement. And the numbers suggest this stock is on the way up. CTS posted trailing 12-month earnings of $69.1 million, up 24.1% year over year. And here's something specifically worth watching. CTS's new CEO, Pratik Trivedi, personally bought roughly $860,000 of company stock earlier this month. That is a real vote of confidence from the highest levels of leadership, timed right as the robotic story is heating up. Now, the Zen ratings show that CTS carries an overall grade of an A. And the standout component grades are safety, which comes in at an A in the top 4%, which means it's one of the safest balance sheets that I track here. And financials is also at an A, top 4% again, tied for the strongest score of any stock in this video. Now, I'm going to be real about this. Growth is currently rated at a C. And this is the one I want you to sit with so you consider this. It's only in the top 66% of our stocks tracked, suggesting that its growth is actually trailing about 2/3 of the market. So, that's worth watching since it kind of suggests that the robotics tailwind here hasn't fully shown up in the numbers yet. So, I would say yes, I would like to see growth in CTS accelerate in the next couple of quarters as real confirmation that this is happening. But with a fortress balance sheet, elite financials, and a brand new CEO putting his own money behind the stock itself, CTS has the foundation to grow into a robotic story that it's already telling investors about. And by the way, if you like stock talk like this, then I once again remind you to check out Wall Street Zen's no-cost live training sessions. You can join our editor-in-chief Steve Reitmeister on Mondays at 7:00 p.m. Eastern time. Now, he doesn't just talk about what he's buying, but actually how he's finding the stocks so you can do the same in the days ahead. He also shares his trade of the week, combining the best of Zen ratings with his 40-plus years of investing experience. So, again, if you're liking this type of content, I strongly recommend just pause the video for a second and go register for free at wallstreetzen.com/live or just scan the QR code on the screen here real quick, register, and we'll see you Monday at 7:00 p.m. Eastern time. All right, pick number three here is Regal Rex, and we're ticker symbol RRX. And honestly, it's the one I'm most excited about to share with you. Now, this company's product catalog literally includes bearings as a standalone category itself alongside electric motors, gearing, couplings, and power transmission components. And the robotics tie-in isn't a stretch, either. Its company portfolio includes Kollmorgen, which is a precision motion control brand used in aerospace, medical, and industrial automation, and guess what? Robotics. Now, here is the numbers, and they're really strong. The trailing 12-month earnings is $286.7 million, which is up 22.7% year-over-year on top of a 42.5% earnings growth for fiscal 2025. And the analyst coverage is the broadest and most bullish in this entire video. Seven different analysts cover this stock, and six of them recommend it as a strong buy, with the seventh recommendation coming in at a buy. There are zero holds, zero sells. The high end of current estimates suggest the stock could see over a 20% upside just in the coming year. But as the bearing trend continues to accelerate, we could see this number change. Now, our Zen ratings show this as an overall grade A, a strong buy. And if we look at the components themselves, value is at a B, which is in the top 16%, so the shares still look reasonably priced even though they're running a little bit higher right now. And growth is also at a B, top 9%, which is one of the strongest growth scores of any stock I've mentioned in this video. Now, the risk to watch here is the safety score, which comes in at a C, which is not really worrisome, but it's not the best out there. And this is reflected by the fact that there's more leverage on the balance sheet than I'd like to see, which matters more if rates continue to stay elevated. Even so, we're seeing unanimous Wall Street bullishness, accelerating earnings, and literal bearings in the product line, plus a robotics-focused motion control subsidiary. If this whole bearings thesis plays out the way that Morgan Stanley and everyone thinks it's going to, then Regal Rexnord might be the cleanest single stock in the market to own it. So, there you have it. A trend that is just starting to unfold with serious potential in the coming months and years. What do you think? Are you going to add any of these stocks that I mentioned to your watch list, or do you have any other potential beneficiaries that you think could work in this robotics play? Drop them in the comments below. I want to hear from you. And if you want to expand your repertoire of high-potential robotics stocks, I suggest you check out this video that's on the screen right now, and you can get more details right here.