Most Wall Street investors, even casual ones, are probably familiar with artificial intelligence’s impact on the market. Think back to the heat of the 2022 bear market, and you’ll recall that stocks were in a debilitating downtrend, inflation was at 40-year highs, the Fed was hiking rates, and investors were unsure where the growth would come from to fuel the next bull market.

However, tech stocks, the most beaten-down market area, began to furiously rebound off the lows amid the most successful application launch in history – OpenAI and Microsoft’s (MSFT) ChatGPT AI Chatbot.

No company has benefitted more than AI GPU-maker Nvidia (NVDA), which has produced triple-digit earnings increases in six consecutive quarters and has grown to into one of the world’s largest companies.

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Though the AI revolution has taken hold, most of Wall Street’s focuses on large language models (LLMs) like ChatGPT and Alphabet’s (GOOGL) Gemini. However, investors should remember that AI’s potential will reach far beyond mere LLMs in the future. Below are three robotics stocks to watch:

In cities like Miami (where I reside), if you walk down the street for more than 15 minutes, you will casually run into small Serve Robotics (SERV) robots delivering food. Serve “Develops advanced, AI-powered, low-emissions sidewalk delivery robots that endeavor to make delivery sustainable and economical. Spun off from Uber (UBER) in 2021 as an independent company, Serve has completed tens of thousands of deliveries for enterprise partners such as Uber Eats and 7-Eleven.”

SERV has parlayed its history with Uber into a pact with Shake Shack (SHAK) and Uber Eats to deliver food. What SERV has accomplished is genuinely disruptive. Instead of paying a courier to deliver food, a small four-wheeled box autonomously drives to your apartment and waits outside until you go to retrieve your food. Not only is the technology more cost-effective, it’s also far more efficient.

As the food is on the way from the restaurant, you receive notifications on your Uber app telling you how far away the robot is. When the robot arrives, simply type in a passcode to unlock the box and retrieve your food.  The two analysts that track SERV expect earnings to jump 51.35% next quarter and 38.01% for full-year 2025.

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Palladyne AI (PDYN), formally known as Sarcos Robotics, is a company that builds AI software for robots. PDYN is working on AI that allows robots to perceive their environment, learn from it, reason, and act with little training or data. The technology is focused on various industries, including manufacturing, logistics, and defense.

PDYN does not have much in the way of fundamentals. Instead, the stock is a speculative bet on the future of robotics that could pay handsomely if the company executes well. In addition, the stock has all the makings of a momentum leader. Over the past year, shares have exploded nearly 2,000%. Currently, PDYN is retreating for the second time to the 50-day moving average in a bull flag chart pattern – an attractive reward-to-risk zone (the first time the stock did this it tripled in a few weeks).

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Real-world AI and robotics are all about training, and no other company on Earth has more real-world AI training data than Tesla (TSLA) (and it’s not close). Tesla drivers have been using full-self-driving (FSD) for millions of miles, and the company boasts the largest AI training cluster on planet Earth. Meanwhile, Optimus, Tesla’s humanoid robot, is further along than any competitor’s robots. Optimus is already performing tasks on Tesla’s manufacturing floors and will go into mass production in 2025 and ship in 2026 (the company just posted engineering positions on its website).

Tesla CEO Elon Musk, who often makes grandiose predictions that usually come true (albeit not always on time), believes that Optimus can become the company’s biggest product ever and bring in revenue North of $10 trillion.

Bottom Line

As AI innovations progress at a dizzying speed, the next great investments will be in real-world AI and Robotics. Robots will increase efficiency, save money, and disrupt legacy businesses in the near future. 

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Microsoft Corporation (MSFT) : Free Stock Analysis Report

NVIDIA Corporation (NVDA) : Free Stock Analysis Report

Tesla, Inc. (TSLA) : Free Stock Analysis Report

Alphabet Inc. (GOOGL) : Free Stock Analysis Report

Serve Robotics Inc. (SERV) : Free Stock Analysis Report

Shake Shack, Inc. (SHAK) : Free Stock Analysis Report

Uber Technologies, Inc. (UBER) : Free Stock Analysis Report

Palladyne AI Corp. (PDYN) : Free Stock Analysis Report

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