STILL EARLY! Top 4 Robotics Stocks that are Better Than Nvidia

This is Nvidia's stock price over the past 5 years. If you had bought just $10,000 in Nvidia 5 years ago, that would be worth over $140,000 today. But the obvious AI investments have already been made. So the question is, what is the next tech trend that will drive value? Because to find the next great stock, it's important that we focus on a company's products and not just their numbers. Massive growth happens when you have the perfect product in a quickly growing market before that market appears like Nvidia. And the next trillion dollar market could well be in physical AI, which is basically robotics powered by real time intelligence. So, we'll look at the four non-obvious areas of the market that will benefit the most from the coming robotics revolution, as well as the specific stocks that I would buy to take advantage of each one. So, let's start with our first stock, which is designing the chips that modern robotics require to run. So, ARM Holdings may well be the most important chip company that isn't already worth more than a trillion dollars. In fact, this company is only around 10% of the value of the big AI chip companies like Nvidia or manufacturers like TSMC, which leaves their stock with a lot more headroom to grow from here. So, first off, when I say robot, I'm not just talking about some flashy humanoid robot demo that may or may not do what's advertised. I'm talking about the machines already creating real economic value today. Robotic arms, warehouse automation, industrial systems, and yes, eventually more advanced autonomous platforms. Many of them running on ARMbased chips. So, what makes this a good time to invest in ARM? Well, I'm going to break this stock down the same way I would any long-term investment. Product relevance to the coming robotics revolution, catalysts that could help the stock price, and financials to see how they're valued. And we'll also look at one big risk that ARM investors should watch out for. So this is the ARM AGI CPU. ARM's first in-house chip built for the AI age. This matters for investors because robotics rely on both edge computing chips that run directly inside a device for real-time processing, kind of like a robot's brain, and on data center computing for more advanced training and orchestration. But what makes ARMS chip unique is that it doesn't try to compete with leaders like Nvidia in GPU making for AI workloads. In fact, here's Nvidia CEO Jensen Wong congratulating ARM on launching this new chip. >> Renee, congratulations on launching ARM's first data center chip. >> Congratulations. Instead, the AGI CPU is designed to work alongside leading data center GPUs, meaning it competes in a much less competitive market than trying to challenge a leader like Nvidia. But that is still a new product. The bigger story for ARM today is how they sit at the intersection between edge and cloud computing, potentially giving them a major advantage over other chip designers in the robotic space. So, okay, robotics, what exactly do we mean by that? Well, when it comes to modern robotics, what we're talking about is physical AI. AI is kind of used to describe everything nowadays. But I define AI as a way to understand messy, unstructured inputs and turn them into useful actions. So digital AI might be turning a text question into an answer. But physical AI might be entering a room, scanning the surfaces, and then sending a series of instructions to move a robot's limbs. And there's two major camps on how this type of AI is going to run. And this is where ARM's investing thesis comes in. The first option is to run your intelligence in the cloud, which has heavier models that live in a data center, and send instructions remotely, kind of like controlling an RC car wirelessly. Or option two, you can push more intelligence onto the machine itself. And this is where edge computing comes in. This would be like an RC car that can drive itself without a connection to the internet. So cloud and data centers can be powerful, but it can be too slow for real-time reactions. While edge computing can respond faster, but it needs chips that can deliver performance without overheating or drawing too much power. Otherwise, your robot isn't going to last too long in the real world. So to power these edge computing devices, you need something that's low enough power and it doesn't overheat, kind of like a chip that you might find in your phone. In fact, this is an edge computing device. Your phone almost certainly has an ARM chip inside of it. Card chips, consumer electronics, and industrial machines all use ARM because they're the best at these low power mobile chip architectures. And so, as robotics first gets off the ground, there's a pretty high likelihood that they'll be running on ARM chips as well. Now, the robotics market is expected to grow 2.5x over the next 5 years, passing $110 billion annually by 2030. And that's not even counting self-driving cars. But of course, a growing market isn't enough by itself. ARM also has to capture more of that market. So, how do they make money? And then we'll move on to some catalysts for the stock as well as the numbers behind them. And then one big risk that investors should know about. So, traditionally, ARM gets paid when other companies license their architecture, charging a royalty to big tech companies to use their instruction set. And these royalties have historically been a huge part of their business. You can see it highlighted in dark blue here. But the other and a growing part of their business comes from creating their own chip designs for sales. This part of the chart here. And this second part is way more interesting to me in the short term because it moves ARM closer to the value stack. They're not just licensing a blueprint. They're designing the actual chip products that are going to power AI and edge infrastructure. And that leads us into the near-term catalyst for ARM. They recently built a $71 million R&D lab in Phoenix. And one of their first new products has been this new custom-designed CPU for AI data centers. And at least according to ARM's executive vice president for cloud AI, the chips have been received pretty well by their customers so far. >> Customers like AWS and Google and Microsoft and Nvidia have all come out and said, "Hey, this is a good thing for the ecosystem." At least eight customers have already committed to purchasing ARM's new CPU >> because while normal AI agents might run on Nvidia GPUs, they need to be able to execute normal computer programs as well, which would run on a CPU like ARMS. So now we have ARM kind of hitting it from both sides. They have the AI data centers where their CPUs pair with Nvidia's GPUs and they have the edge computing side. Now, it's still early days in their chip design phase and they're not quite printing money yet. But that being said, this company is relatively small for their market. At a $240 billion market cap, they're less than 10% the size of a company like Nvidia, and smaller size can create more upside if the company can execute. So, let's look at ARM's financials because this is where the biggest risk for the stock shows up. So, while ARM is positioned very strong strategically, their short-term financials don't look as strong. For one, the company has said they don't expect ARM AGI CPU to really impact earnings until March 2028. So, that at least probably won't help the stock in the short term, but that doesn't mean you don't want to buy it now because by the time it shows up, it's probably too late to buy in. And if we look at their financials on Seeking Alpha, their gross profit looks pretty good and so does their revenue. But by any of the standard valuation metrics you would use for a company, they are very expensive at their current price. So for me, this is not an all-in or a next quarter profit story. This is more of a medium-term bet where the outcome depends on how much revenue they get from their design business. So if that revenue, especially from their new CPU, doesn't start to show up in 2028, that for me would be a reason to sell the stock and re-evaluate my thesis. But this next stock looks like a much better buy at its current price. And it's one of the few companies making and selling real robotics for industrial and warehouse applications today, making billions of dollars in revenue. But the market so far is not recognizing their potential. And if you've seen me use this website in a bunch of different videos, this video is sponsored by Seeking Alpha. And Seeking Alpha Premium is one of the tools that I use to pressure test stocks like this. So, with Premium, you get access to all the research data behind a stock, including financials, but also including earnings transcriptions, which I've said before, one of the biggest tips if you're trying to learn about a company is to read a transcript of their earnings because you literally have the CEO of the company on a call telling you what is important to the stock. And Seeking Alpha makes it even easier to use this info because they'll generate insights from each of these calls. But what makes Seeking Alpha really powerful is it doesn't just throw numbers at you. It actually explains what they mean. You can actually generate a full summary of a stock, including who their competitors are, what makes them unique, their financials, and expert analysis. All of it pulling from Seeking Alpha's deep history of financial research and analysts. So, if you're looking to up your investing game, click the link in the description or scan the QR code on screen. And when you click that link, you get an additional $30 off in annual Seeking Alpha premium plan. So, make sure you use that link when you sign up. But, okay, let's get to stock number three, which is the stock that has the most direct exposure to robots being built and sold today. So, next up is Symbotic, which is a stock that we've covered before, but I need to tell you the latest news here because the stock just dropped 20% in price while reporting their first ever profitable quarter. And that kind of disconnect is exactly what I look for because it means the market is missing something. So this stock could be higher risk, but it could also have the highest short-term potential reward. So Symbotic is a pure robotics play. They sell robots and automation systems to the biggest companies on Earth. This is important because it's still a relatively small company. Their market cap is currently $30 billion. And at that size, the upside can be more meaningful. This isn't necessarily a better company than Nvidia, but it's a different kind of bet. It's smaller, has more execution risk, but because it is smaller, there's potentially more room for upside if things are done correctly. So, what does Symbotic do? How do they make money? And what needs to happen for them to rise from here? So, Symbotic is focusing on one of the most profitable areas of robotics today, warehouse automation. And robotics automation is one of the key use cases for robotics today. So, Symbotic specializes in all kinds of logistic automation from automating the sorting and storage of goods using computer vision to expect for damage and accuracy and building a warehouse infrastructure for robots, reducing the time spent picking up and dropping off products. And any kind of efficiency here is a really big deal because of how much money is spent on this industry. The third party logistics business is estimated to be worth around 10% of global GDP. Think about that. For every $100 spent anywhere in the economy, $10 of that goes to logistics. Now, that doesn't mean Symbotic is going to take over that whole market, but it means that even small increases in efficiency here can result in very big rewards for those companies. And this has led companies like Walmart and SoftBank to pursue these efficiency gains. But even more specific, the warehouse automation market is expected to grow at double the broader economy through 2030 with the largest share of that investment going into hardware and systems. Now, Symbotic is aggressively pursuing parts of that large addressable market, which is worth over $1 trillion per year in total. And their new distribution center design has won some large contracts that we'll see in a second. But if everybody is investing in the space with Amazon, for example, using over 1 million robots in their warehouses and in fact adding more robots than employees per year, it makes you question why is this company's stock price down 20% for the year so far? Is this a broken story or is this an opportunity to buy the stock at a discount? Well, let's take a look at their earnings to see. So, Symbotic has shown strong revenue growth over the last several years. And with over $22 billion in contracted backlog, they have a lot of room to keep growing. And what's nice to see is their gross profit has also improved a ton recently. And the company has even reached net profitability in their two most recent quarters. But all the growth they're seeing is also probably the reason the stock price is down. If we zoom out a little more, we can see that the company's stock price rose by as much as 300% in 2025. And so selling off a little bit of those gains kind of made sense coming into 2026. The stock just got ahead of where the valuation could be supported. But now that the company has already seen that big drop, the ratings from Seeking Alpha analysts, Wall Street, as well as their quant score all put this as a fairly strong buy. But more importantly, the company has moved from very expensive to a fairly reasonable valuation, which could be supported, especially if their growth continues from here. So, let's look at one new major catalyst for growth and then some risks that investors should watch out for. So, Symbotic lives and dies on big contracts from warehousing companies. They already have a massive Walmart deal. In fact, they bought Walmart's entire in-house automation division back in 2025. And this is both a strength and a risk. You get access to a lot more potential revenue, but you're also very concentrated in one customer. And so, to combat this, they have been aggressively investing in research and development. You can see they've spent over $200 million in the most recent year and they're taking advantage of advances from companies like Nvidia to apply this technology to realworld problems to capture some of this industrial robotics wave. This has recently led wholesale grocerers, which is the largest co-op food wholesaler, to launch a major automation project with Symbotic, with the project expected to go live in early 2027. In my last video where I covered this stock, I talked about their large contract backlog and how all they really had to do was execute on existing contracts and they would grow. And them winning this new deal with wholesale grocerers seems like a vote of confidence in that direction. The company also recently joined the DO skill bidge program which could have some small strategic implications, but it is a little bit of a tangent. So I'll share my more detailed thoughts in a write up on the free stock deskboard for this video. But the biggest risk here is actually the same as the last time I covered this stock. And it's really important for investors to understand this. See, Symbotic has plenty of sales runway. Walmart alone can be a multi-billion dollar per year customer for them. It's now just a question of how well they can deliver on all the demand that they're receiving. So, the demand side looks real. The real question is operational execution. Can they deploy these scales on time, at scale, and with economics that justify their current valuation? It helps that their CEO has a background in groceries and their tech lead actually comes from automotive automation with some experience as the head of Google's robotics division coming straight out of Stanford. But the other risk, their biggest competitor in their space is the 600 lb gorilla in the room. Amazon, they've already built a massive in-house automation machine, which shows both how valuable this category really is and how serious the competition can be. So look, with this stock, the market is not debating whether or not the robotics is real. It's just debating on whether or not this company can execute well enough to deserve a higher valuation or not. So if this stock pays out, it could be a multibagger return, but there's also a lot of risk because it has dependency on a single company. And so personally, this would not be a core holding for me. But let's now turn to stock number two on our countdown in what I think is one of the most overlooked ways to invest in the robotics buildout. And after that, I'll show you my top overall stock pick in the space. I think the sun is setting behind me, so I'll have to finish these last two sections. So, one thing that makes robotics hard to invest in is that the value is spread out across a lot of different industries, but often the biggest winners aren't the flashiest robot makers. They're the companies supplying critical infrastructure behind the scenes. So, while a lot of small stocks have been slapping AI onto their name, there's been a whole class of companies that sat back and quietly made a fortune building the hardware for testing and manufacturing the chips driving the AI boom. And they are now gearing up to play a similar role in robotics both as users and creators of the technology. So, Pterodine's products, Tterodine builds the testing and automation systems that ensure AI hardware like processors and chips work reliably and can scale to meet growing demand. Pterodine benefits from robots in two ways. Number one, more chips used in physical AI means more complexity and demand for testing. And second, they benefit from their own automation and robotics products. So, what does Pterodine actually do? Well, if we imagine assembling a chip like an orchestra, everyone needs to play in harmony, and if one musician is out of tune, it ruins the whole thing. Pterodine is like the conductor who tests every musician before the concert begins. And the more complex the harmony or chip, the more important that testing becomes. Only with Pterodine, this testing is automated using robots. This automated test equipment market is worth over $10 billion per year, but it's expected to more than double by 2032. It's also a very concentrated market with Pterodine and Adventest being the two biggest players in the space. It's basically a duopoly which is good in terms of the pricing power that Pterodine has. Now on top of testing they also have a separate business where they sell automation equipment to other companies like this robot they built in partnership with Nvidia's simulation platform. And this is where it gets pretty cool. So you remember that clip I showed you earlier of an automated Amazon warehouse? Well, if we freeze and enhance, you see that logo on the robotic arm? That UR stands for universal robotics. And those UR branded arms are collaborative robots designed to work alongside humans across a range of industrial settings. And that flexibility makes them really interesting. Now, it can't do everything. It can't go on a hike through the woods yet, but they've built a system that is flexible enough to work in a warehouse or in a metal fabrication shop like this one. It's an area Pterodine has been investing in and partnering with some pretty big names in the space like Nvidia. But more importantly, it's a growing segment of the business. And so in terms of catalysts here, there's been a big push by politicians and companies to reshore manufacturing. This is an older chart, but you can see an uptick in CEOs talking about bringing manufacturing either into the United States or into nearby countries. So if manufacturing gets reshored into more expensive labor countries, automation becomes even more important because both consistency and labor are expensive and so robotics can help close that gap. In fact, even in lowerc cost markets like China, companies are still automating aggressively, which tells you this is not just about US labor costs. It's really a productivity story and it's also a big opportunity. So, let's take a look at Pterodine's numbers and then we'll see some risks here before going on to my top overall stock pick in the robotic space. Right now, the compute market is seeing explosive growth. So, Pterodine is focused on meeting that demand with their testing products. This slide shows they offer testing across the whole life cycle of a data center, but robotics is especially important in the final stages, assembling the chips into trays, which eventually go into racks in the data center. But what stands out most is the recent growth in those numbers. Revenue rose 87% over the past year and management is also expecting strong free cash flow in the coming quarters. I'm sure you've seen all the investment that is happening in data centers right now. So the key question is will that growth stick around or is it solely driven by the current surge in AI infrastructure spending? I have a whole video that talks about that in more detail. But one good sign, management has bought back some shares recently, which at least suggests that management saw value in the business. But that is also the biggest risk here. In terms of valuation, the company is pretty expensive by most valuation metrics you can use. And so, the market is pricing this stock as if it's going to grow from here. In fact, after their most recent earnings, the company's stock price dropped by 18% after the company said they expected growth to slow after the AI spending spree, which shows that the market is very sensitive to any signs of slowing growth here. So, for me, this investment only works if there's another area of growth that the market isn't factoring in to the current stock price. And I think that there is one. If we look at Terodine's robotics division, which includes Universal Robotics, it brought in around 10% of Pterodine's revenue this quarter, up 32% year-over-year, which is actually an acceleration from their growth in the past. Now, the CEO did say on their earnings call, quote, "We are still being quite cautious about robotics and predicting higher rates of growth until we get a bit further down the road." And I actually like that management is being cautious here. They're not trying to overhype the robotic story until they see long-term continued demand. But because there's been so much attention on Pterodine's testing business and the huge surge that they've seen, it's almost been masking the robotic story around this stock. And so, I think that this is a long-term play, but the market may not be fully valuing the robotics part of their business. So, I like the stock for a five plus year investment. But let's take a look at the final stock. And by the way, if you've enjoyed this video so far, or you've seen my annoying thumbnail face in the past, consider subscribing. We are getting close to 250,000 subscribers of many, many years of making these videos. And I couldn't do it without everybody who subscribed. So, thank you. But, okay, as much as I've liked the earlier stocks we've talked about so far, if you don't want to bet too heavily on any one company, you can buy a robotics ETF. Basically, a basket of stocks spread across the entire robotics space. So, there's several you can pick from, but these funds are not identical. Some lean more industrial while some are more volatile. I'll talk about two. Robo leans heavily into midcap growth stocks with very high volatility, while Bots BOTZ holds more larger cap growth stocks, but also with high volatility. My overall pick is bots because it has lower fees and its holdings are spread across multiple parts of the robotics value chain. It also gives you exposure to parts of the robotics market we did not cover directly, including medical robots and some non US names like in China. So, we made it before sunset. If you liked this video, I made a whole video covering the top four quantum stocks today. And this area is a lot earlier than robotics, but it has some really interesting companies doing well in the space