Al Root

Advancements in artificial intelligence are enabling a host of new virtual applications, such as AI agents that can help write software, manage a company's books, create short- and long-form videos, and write college entrance essays.

AI also is good enough to run machines that can interact with the real world. The business potential of robots is measured in the trillions, which has caught the interest of nearly every Wall Street broker.

The latest example is a report from Jefferies titled "From Asimov to the Assembly Line: Humanoid Robots Begin to Clock In." (Asimov, a famous science fiction writer, wrote I, Robot decades ago.)

"Given recent advancements in materials science, battery technology and, [most] importantly, AI/processing, the dream of larger-scale deployments is edging closer to reality," wrote more than a dozen analysts, spanning several industries, in a co-authored report. "We provide an overview of the major components of humanoid robots and key players in the supply chain as investors await the technology's iPhone moment."

In short, robots mean more business for nearly every company that makes semiconductors, actuators, batteries, motors, and countless other electrical components. It also means business for Tesla, which is looking to dominate the robotics market with its Optimus humanoid. The third generation of Optimus is due to be unveiled in the coming weeks.

Jefferies sees 1 million robots produced annually by 2030 and 5 million by 2035. Eventually, costing an estimated $25,000 per copy, human-like robots would be cheaper than hiring humans. Humans make more than that annually, but upfront cost isn't the only cost. Robots need to be stored and maintained. Jefferies estimates powering robots will cost up to $2 per hour.

The threat of taking human jobs is real, but the U.S. is lacking skilled manufacturing workers. Robots can help there, Jefferies says.

Its estimates and thesis mirror calls from Goldman Sachs, Morgan Stanley, UBS, and Barclays, to name a few. None of the estimates and timelines is exactly the same, but they all predict that robots are closer than investors might assume and that the potential market is measured in the trillions.

It's time for investors to get acquainted with robots. Barron's recently suggested that investors can focus on high-quality industrial companies that make components, including Teledyne Technologies, Aptiv, MP Materials, and others. Nvidia also stands to benefit. More AI-trained robots mean more demand for their processors.

There aren't many ways to invest directly in robot makers in the West yet. Tesla might be the most direct way, but that stock, at almost 200 times estimated 2026 earnings, already reflects a lot of robot optimism.

Still, it's worth watching Tesla's robot-related developments to see how the industry is advancing.

Write to Al Root at allen.root@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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March 25, 2026 10:41 ET (14:41 GMT)

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