Invest in These Two AI Robotics Stocks Predicted to Skyrocket by 185% and 315% as Perceived by Wall Street Specialists
Jensen Huang, head honcho of Nvidia (NVDA with a 4.45% surge), is renowned for leading a company whose tech powers a majority of AI systems worldwide. During a tech gathering last year, Huang sensationalized: "AI's new wave is upon us. AI-driven robotics are set to transform industries."
Elon Musk, boss of Tesla (TSLA jumping by 8.22%), shared a similar sentiment last year: "By 2040, I reckon there will be more humanoid robots than people."
Analysts from Citigroup forecast that humanoid robot sales will reach $14 billion by 2030, $1.1 trillion by 2040, and an eye-popping $7 trillion by 2050. Market experts believe shareholders in Nvidia and Tesla could rake in big profits:
- Beth Kindig, equity analyst, reckons Nvidia could become a $10 trillion company by 2030, a 185% hike from its current worth of $3.5 trillion. This could translate to a 19% annual gain over the next 6 years for Nvidia stock.
- Ron Baron, mega-bucks investor, pegs Tesla as a $5 trillion company within a decade, a 315% boost from its current value of $1.2 trillion. If that happens, Tesla stock might nudge up by 15% annually over the next 10 years.
Here's what potential investors should know about Nvidia and Tesla:
1. Nvidia
Nvidia is primarily known for its graphics processing units (GPUs), powerful chips that boost complex data center operations, such as running AI apps. Nvidia commands 98% of data center GPU sales, and its superiority is mainly down to its CUDA ecosystem of development tools.
Nvidia Isaac, a platform for robot development, is built upon CUDA. It boasts libraries and pre-trained models that aid in creating robotics applications in various sectors: industrial manipulation arms, autonomous mobile robots, and humanoid robots. Isaac includes a simulator engine, which lets developers generate artificial training data and test robotics models.
Packing GPUs, central processing units (CPUs), memory, and storage, Nvidia Jetson systems are embedded chips that complete the robotics computing stack. In layman's terms, GPU-powered servers deliver the supercomputing infrastructure required to educate AI models; Isaac offers the tools needed to construct robotics applications; and Jetson systems provide the computing muscle autonomous robots need to function.
Nvidia GPUs drive most generative AI systems, so investors have reasons to trust that these chips will anchor most physical AI systems. Generative AI can create new content, while physical AI can understand and interact with the physical world, enabling autonomous robots.
Wall Street predicts Nvidia's adjusted earnings will rise by 52% yearly until fiscal 2026, a tidy 55 times adjusted earnings valuation. With ample patience, investors should feel confident making a small buy into this stock now.
2. Tesla
Tesla is famed for electric vehicles, but CEO Elon Musk revealed earlier this year that the company should be considered an "AI or robotics firm." Tesla has engineered the hardware powering Full Self-Driving software and applied it to a humanoid bot named Optimus.
Musk has proclaimed Optimus is "the most advanced humanoid robot by a mile." While he anticipates monumental growth in autonomous driving technology, Musk believes Optimus will surpass the value of all other Tesla products combined. He's even flirted with the idea that Optimus could lift Tesla's market cap to a staggering $25 trillion.
Musk expects "thousands of Optimus robots" to toil in Tesla factories this year, and the company plans to sell them to customers as production ramps up in 2026. As Musk has a history of inflated expectations on spurious timelines, investors shouldn't pin their hopes on these projections as gospel. However, Musk has a habit of delivering on his promises, albeit not always as timely as he suggests.
Wall Street estimates that Tesla's adjusted earnings will grow by 27% annually till 2025. This consensus makes the current valuation of 170 times adjusted earnings look ludicrous. But for investors who believe Tesla can monetize autonomous driving technology and humanoid robots, it's wise to invest yesterday, with a few shares today and add more when the stock dips.
Investors who are interested in the tech sector might consider allocating some of their money towards companies like Nvidia and Tesla, as both companies have strong potential in the field of artificial intelligence and robotics. For instance, Nvidia's graphics processing units (GPUs) are crucial for running AI applications and powering generative AI systems, while Tesla, under Elon Musk's leadership, has positioned itself as an "AI or robotics firm" with the development of its Full Self-Driving software and humanoid bot, Optimus.
As analysts predict substantial growth in AI and robotics, potential investors might see significant returns on their investment in these companies. For instance, Beth Kindig, an equity analyst, estimates that Nvidia could become a $10 trillion company by 2030, while Ron Baron, a mega-bucks investor, anticipates Tesla's market value to reach $5 trillion within a decade. These estimates suggest that shareholders in Nvidia and Tesla could generate impressive profits in the coming years.
