2 AI Robotics Stocks to Buy Before They Soar 185% and 315%

Jensen Huang, the CEO of Nvidia (NVDA), leads a company whose chips are integral to most artificial intelligence (AI) systems. During a technology conference last year, Huang made an exciting statement: "The next wave of AI is here. Robotics, powered by physical AI, will revolutionize industries." This sentiment aligns with thoughts expressed by Elon Musk, CEO of Tesla (TSLA), who predicted that by 2040, there may be more humanoid robots than humans.

With these visions in mind, analysts at Citigroup estimate that humanoid robot sales could reach $14 billion by 2030, expand to $1.1 trillion by 2040, and possibly hit $7 trillion by 2050. Given these optimistic projections, Wall Street experts see significant growth potential for both Nvidia and Tesla investors:

• Equity analyst Beth Kindig projects Nvidia could grow to a $10 trillion company by 2030, suggesting an upside of about 185% from its current market value of $3.5 trillion. This growth would equate to approximately 19% annual returns over the next six years.
• Billionaire fund manager Ron Baron has forecast that Tesla might reach a market value of $5 trillion within a decade, indicating a staggering 315% increase from its current $1.2 trillion valuation. If true, Tesla stock could provide annual returns of about 15% over the next ten years.

Here’s what potential investors should know about Nvidia and Tesla.

Nvidia

Nvidia is renowned for its graphics processing units (GPUs), which are crucial for accelerating complex data center workloads and running AI applications. The company captures 98% of the data center GPU market share, primarily due to its robust software development ecosystem known as CUDA.

The Nvidia Isaac platform is specifically designed for robot development using CUDA. It consists of code libraries and pre-trained models that assist engineers in creating robotics applications across three main areas: industrial manipulation arms, autonomous mobile robots, and humanoid robots. Additionally, Isaac contains a simulation engine to help developers generate synthetic training data and test robotics models.

Nvidia’s Jetson systems are embedded chips merging GPUs, central processing units (CPUs), memory, and storage to complete the robotics computing stack. In summary, while GPU-accelerated servers provide the necessary infrastructure for training AI models, Isaac supplies development tools for robotics applications, and Jetson systems offer the computing power that autonomous robots require to operate effectively.

As Nvidia GPUs are fundamental to most generative AI systems, it stands to reason these same chips will form the backbone of physical AI systems. Unlike generative AI, which focuses on content creation, physical AI pertains to technology that interacts with the physical world — a key component for aiding autonomous robots.

Wall Street anticipates that Nvidia's adjusted earnings will grow by 52% annually through fiscal 2026, which concludes in January 2026. This makes the current valuation of 55 times its adjusted earnings appear reasonably justified. Consequently, patient investors may consider establishing a small position in this stock today.

Tesla

While Tesla is primarily recognized as a leader in electric vehicles, CEO Elon Musk emphasized earlier this year, "We should be thought of as an AI or robotics company." The company has developed the supercomputing hardware necessary for its Full Self-Driving software and is applying this tech to create a humanoid robot called Optimus.

Musk described Optimus as "the most advanced humanoid robot by a long shot." While he sees substantial potential in autonomous driving technology, he believes Optimus could eventually be more valuable than all other Tesla products combined, even suggesting that it could elevate Tesla’s market value to $25 trillion.

This year, Musk anticipates deploying "several thousand Optimus robots" in Tesla factories, with plans to begin selling Optimus to customers as production increases in 2026. Although Musk has made ambitious promises regarding timelines in the past, he has consistently delivered on many of his commitments over time.

Current expectations on Wall Street suggest Tesla's adjusted earnings could rise at a rate of 27% annually through 2025. This consensus makes the current valuation of 170 times adjusted earnings seem high. Yet, for patient investors who trust Tesla’s potential to monetize both autonomous driving tech and humanoid robots, starting with a few shares today and considering increasing their holding during price dips could be a sound strategy.

Note: Remember that investing in stocks involves risks, and it's essential to do thorough research before making any investment decisions.

AI, Investing, Robotics