The Next Tech Boom Is Robotics (3 Stocks to Buy Now)
How embodied intelligence represents the next trillion-dollar revolution—and which companies are positioned to dominate
Published: September 15, 2023 | Updated: September 18, 2023
The Robotics Revolution: AI Jumps Off Your Screen
While investors have been focused on software-based AI, the next phase of artificial intelligence is already underway—and it's happening in the physical world. The biggest tech companies are pouring billions into what industry leaders call "embodied intelligence"—AI that exists in physical forms rather than just on screens.
"AI is about to jump off our phone screens and run and jump into physical bodies. That's going to change the world around us in very, very significant ways."
This shift from digital AI to physical robotics represents what could be the biggest investment opportunity of the decade. According to analysts at JP Morgan and Morgan Stanley, robotic AI could add approximately $500 billion in annual profits and about $8 trillion to the market cap of the S&P 500.
3 Stocks Positioned to Dominate the Robotics Revolution
Tourmaline Oil (TRMLF)
The Energy Backbone of the AI Revolution
Every technological revolution in history has been, at its core, an energy revolution. The embodied intelligence era will place unprecedented demands on power infrastructure as physical AI systems require continuous, reliable energy to operate safely.
Investment Thesis:
- Canada's largest natural gas producer with exceptional profitability
- $514M net income on $1.5B revenue in Q2 (30% net profit margin)
- 43% dividend increase and aggressive stock buybacks
- Critical supplier to data centers powering AI systems
- Low debt levels and strong leadership
Strengths
- Exceptional profitability metrics
- Strong leadership with 20+ years experience
- Positioned for increased energy demand from AI
- Shareholder-friendly dividend and buyback policy
Risks
- Commodity price exposure
- Regulatory environment for energy companies
- Transition to renewable energy long-term
Current Price: ~$40/share
Howmet Aerospace (HWM)
Industrial Automation Leader
The most immediate application of embodied intelligence is in industrial settings, where robotics can dramatically improve efficiency and reduce costs. Amazon's recent announcement that they now employ more robots than people in their warehouses highlights this trend.
Investment Thesis:
- Leader in aerospace components with embedded AI systems
- Q2 revenue of $2B (up 9% YoY) with net income surging 52% to $500M
- Intelligent robotics and 3D printing reducing waste and improving efficiency
- $175M in recent stock buybacks
- Demonstrable efficiency gains from AI integration
Strengths
- Tangible efficiency improvements from AI
- Strong financial performance
- Positioned in growing aerospace sector
- Wall Street reassessing valuation due to improved metrics
Risks
- Cyclical aerospace industry
- Dependent on manufacturing sector health
- Competition in industrial automation
Current Price: ~$170/share
Advanced Micro Devices (AMD)
The Semiconductor Powerhouse for Robotics
While Nvidia has dominated AI chip discourse, AMD has made significant strides in catching up with their MI355 chips, which now compete with Nvidia's Blackwell GPUs. Their competitive pricing and strong positioning in drone and robotics applications make them a compelling investment.
Investment Thesis:
- MI355 chips now performance-competitive with Nvidia's offerings
- 32% YoY revenue growth with strong operating income
- Potential to form AI semiconductor duopoly with Nvidia
- Strong positioning for drone and robotics applications
- Competitive pricing advantage over Nvidia
Strengths
- Competitive pricing advantage
- Strong revenue growth
- Diverse applications in drones and robotics
- Magnificent 7 companies increasing orders
Risks
- Currently trailing Nvidia in market position
- Recent stock volatility
- Dependent on continued AI investment cycle
Current Price: ~$166/share
Market Outlook: Why Robotics Is the Next Big Thing
The embodied intelligence revolution is still in its early stages, but corporate spending patterns suggest accelerated adoption. The key indicator to watch is capital expenditure from major tech companies—as long as this continues to grow, the AI investment thesis remains intact.
"When you see capital spending from the Magnificent 7 go down, then you worry the AI story is over. But until that happens, market corrections are just turbulence in an ongoing bull market."
Recent pullbacks in tech stocks represent potential buying opportunities rather than fundamental shifts, provided that the underlying investment trends remain strong. The massive capital expenditures from leading tech companies suggest that embodied intelligence is not a speculative trend but rather the next phase of the AI revolution that is already underway.
Comparison of Robotics Investment Opportunities
| Company | Ticker | Current Price | Sector | Key Advantage |
|---|---|---|---|---|
| Tourmaline Oil | TRMLF | $40 | Energy | Critical AI infrastructure provider |
| Howmet Aerospace | HWM | $170 | Industrial Automation | Demonstrable efficiency gains from AI |
| Advanced Micro Devices | AMD | $166 | Semiconductors | Competitive alternative to Nvidia |
Conclusion: Positioning for the Robotics Revolution
The transition from screen-based AI to embodied intelligence represents one of the most significant technological shifts of our time. While the applications—from robot dogs to autonomous vehicles—may seem futuristic, the investment implications are very much present today.
Companies that provide the foundational elements for this revolution—energy, industrial automation capabilities, and processing power—are positioned to benefit regardless of which specific applications ultimately dominate. The key for investors is to focus on companies with strong fundamentals that are already demonstrating tangible benefits from AI integration.
As with any technological transformation, there will be volatility and uncertainty. However, the massive capital expenditures from leading tech companies suggest that embodied intelligence is not a speculative trend but rather the next phase of the AI revolution that is already underway.
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