The focus of AI investment in Asia is undergoing a significant shift. While semiconductor stocks face overall pressure, robotics and humanoid robot concept stocks are experiencing a powerful rally. "Physical AI" is beginning to replace chips as the new narrative driving capital inflows this cycle.
The standout performer this week emerged in Seoul—LG Electronics saw its shares surge a staggering 55% over the week, topping gains in major Asia-Pacific benchmark indices, following reports of potential collaboration with NVIDIA on humanoid robots. In Japan, Fanuc's stock rose about 10% during the week after announcing a partnership with Alphabet's Google to develop AI capabilities for industrial robots. In China, Le Dong Robotics saw its shares soar as much as 150% on its Hong Kong trading debut.
NVIDIA CEO Jensen Huang has recently been positioning humanoid robots and autonomous machines as the next major computing platform following generative AI. Market research firm MarketsandMarkets predicted last month that the physical AI market will grow at an average annual rate of 47%, reaching a size of $15.2 billion by 2032.
"The rebound in robotics stocks reflects the evolution of the AI cycle from digital deployment to physical deployment," said Gary Tan, a portfolio manager at Allspring Global Investments. "'Physical AI' is becoming the next growth frontier for AI-related trading."
Individual stocks took turns leading the charge, igniting a broad rally across Asian robotics concepts this week. LG Electronics was the biggest winner. Reports of a potential partnership with NVIDIA in the humanoid robot field directly ignited market interest, propelling its shares to a 55% weekly gain, making it the top performer among regional benchmark indices.
Japan's factory automation leader, Fanuc, saw its stock rise approximately 10% after announcing a collaboration with Alphabet's Google to jointly develop AI capabilities for industrial robots, validating the market's imagination around combining top-tier AI software with traditional industrial hardware. South Korea's Hyundai Motor also received a boost this week—reports indicated the Korean military is exploring a strategic partnership with the company, with potential areas including deploying robotics technology in military scenarios.
In the Chinese market, Le Dong Robotics' shares skyrocketed over 150% on its first day of trading in Hong Kong, adding a significant footnote to the strong performance of the robotics sector this week.
The core driver of this rally is the series of actions by NVIDIA and its allies. Huang's increasingly frequent public statements defining humanoid robots and autonomous machines as the most important new computing platform after generative AI have provided a powerful narrative backing for valuation expansion across the entire robotics field. Reports of NVIDIA's collaboration with LG Electronics on humanoid robots, along with a series of earlier partnership news with other Asian robotics firms, have successively ignited rallies in related stocks.
Google's partnership agreement with Fanuc provides confirmation from another angle—the combination of global top-tier AI software capabilities with Japan's strengths in factory automation hardware offers a concrete implementation path for AI upgrades in industrial robots. It also indicates that major technology platform companies are viewing physical AI as a crucial strategic direction.
In the regional competitive landscape of this sector, China, Japan, and South Korea each possess comparative advantages and are accelerating their deployments, according to Bloomberg. China has established a relatively leading first-mover advantage. While continuously expanding robotics manufacturing capacity, the practical application of domestic humanoid robots is also frequently setting new records. On May 14th, the 2026 Second Hangzhou International Humanoid Robot and Robotics Technology Exhibition officially opened at the Hangzhou Convention and Exhibition Center. The three-day event, spanning 30,000 square meters, gathered nearly 600 domestic and international companies, including Unitree and Tesla, showcasing cutting-edge technological achievements in humanoid robots, core components, and brain-computer interfaces, vividly demonstrating the scale and commercialization progress of China's embodied AI industry.
Japan, with its decades of deep expertise in factory automation, is viewed by the market as a strong contender in the transition to physical AI. South Korea aims to broaden the overall prominence of its AI industry beyond memory chips by leveraging the robotics sector. The potential collaboration between LG Electronics and NVIDIA, as well as Hyundai Motor's military robotics initiatives, reflect this strategic intent.
Despite the sharp rally in robotics concept stocks, several market participants caution that this trade is still in its early stages, and the challenges for commercial implementation cannot be ignored.
"Physical AI has to deal with issues around safety, regulation, factories, supply chains, and customer trust, which are far more complex than generative AI," said Charu Chanana, Chief Investment Strategist at Saxo Markets. "My sense is that this is still a future opportunity rather than something that can be scaled immediately."
Beyond the uncertainty in commercialization timelines, robotics-related companies also face the test of whether their valuations, after significant price increases, can be supported by actual profits—a common challenge in high-growth sectors. The current strength in the Asian robotics sector primarily reflects the market pricing in expectations for the next AI growth frontier. Whether the fundamentals will materialize as anticipated remains a key unresolved variable.