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Remember Skynet? The Terminator's AI overlord that triggered the apocalypse in 2029?

It felt like distant sci-fi...until now.

Morgan Stanley's prediction of 63 million humanoid robots by 2050 is a chilling reminder that the rise of machines isn't just Hollywood fantasy anymore. It's happening.

But here's the twist: You don't have to fear the future. A chance to profit from it is possible.

At Investing Wise Academy, we're not building T-3000s. We're building portfolios.

All you have to do is read what we have prepared for you in this episode! Be sure to read and engage with us in the comment section.

Before we begin, let's quickly discuss one of the stocks in our Wise Portfolio that may bring value to you today.

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Let's highlight this wise portfolio centered on the gaming industry and consisting of 31 robust stocks. The Year-to-date gain is +29.47%, and if you had invested in these 31 solid stocks five years ago, the gain would be +244.79%.

One of the assets in this portfolio is Applovin Corp ($APP), which has grown 81.42% in the past six months. Take a look at the chart below:

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2024 is emerging as a groundbreaking year for technology, with a particular spotlight on robotics. While artificial intelligence (AI) continues to evolve and impact various sectors, robotics—specifically humanoid robots—are beginning to transition from science fiction to reality. Humanoid robots, designed to mimic human appearance and functions, have long been depicted in movies like The Terminator and iRobot. However, the future of these robots is now becoming a tangible and lucrative prospect.

Market Predictions and Industry Impact

According to Morgan Stanley's research, the humanoid robot market is set for explosive growth. The report forecasts that by 2030, the number of humanoid robots could reach approximately 40,000. This figure is expected to surge dramatically, reaching 8 million by 2040 and a staggering 63 million by 2050. To put this into perspective, the population of 63 million humanoid robots would exceed the population of 27 of the 50 most populous countries in the world today.

The financial implications are equally impressive. By 2040, the economic impact of these robots is projected to reach $357 billion in wage savings. This impact could increase significantly to $3 trillion by 2050. These projections highlight the potential economic transformation driven by humanoid robots across various industries.

Key Industries and Adoption Rates

Morgan Stanley’s report categorizes industries based on their readiness for humanoid robot adoption. These industries are divided into tiers, with different adoption timelines and potential impacts:

The adoption rates for these industries are forecasted to be between 67% and 70%. In the near term, the wage impact from humanoid robots in these sectors is projected to grow from $1 billion in 2030 to $158 billion by 2038.

This tiered approach underscores the varying levels of readiness and potential for humanoid robots in different sectors.

Special Focus on Social Care

One of the most promising applications of humanoid robots is in social care. Morgan Stanley identifies social care as potentially the largest total addressable market (TAM) by the end of the century. This sector faces significant challenges due to restrictive funding and a shortage of skilled workers. Humanoid robots could be crucial in addressing these challenges, especially given the global trend toward an aging population and increased demand for care services. However, widespread adoption in social care may take time, requiring careful consideration and planning.

Market Valuation and Cost Projections

The potential market value of humanoid robots is a subject of significant speculation:

These figures illustrate the varying potential of the humanoid robot market, driven by advancements in AI and decreasing BOM costs.

Recent Developments in BOM Costs

Recent advancements have led to a notable decrease in the BOM for humanoid robots. Between 2023 and 2024, BOM costs have dropped by approximately 40%, now ranging from $30,000 to $150,000. This reduction is attributed to the availability of cheaper components, improvements in design, and more efficient manufacturing techniques. For example, the cost of T-screws has decreased significantly due to a shift from electric discharge machining to mechanical machining.

Based on Morgan Stanley’s analysis, here are two prominent stocks in the humanoid robot sector. These companies are categorized into two groups: enablers and beneficiaries. Enablers provide critical technologies and components, while beneficiaries are poised to gain directly from the rise of humanoid robots.

1. Synopsys, Inc. (NASDAQ: SNPS)

Recent Commentary: According to TimesSquare Capital Management’s Q1 2024 investor letter, Synopsys is facing potential short-term challenges due to the acquisition, leading the firm to sell its position in the stock.

2. STMicroelectronics N.V. (NYSE: STM)

Recent Commentary: During its Q2 2024 earnings call, STMicroelectronics reported declining customer order bookings and revenue, particularly in the industrial and automotive sectors. Despite these challenges, the company is focused on achieving its revenue targets for the year.

How Cathie Wood’s ARK Is Thinking About Humanoid Robotics?

ARK Invest's latest research paints a mind-blowing picture: humanoid robots could generate nearly $24 trillion in revenue, transforming industries and creating unprecedented investment opportunities. While Elon Musk's vision of robots exceeding human capabilities is still a few years off, the potential for even modest productivity gains from these machines could trigger a massive shift in the manufacturing landscape.

According to ARK’s research, the US manufacturing sector employs nearly 12 million people who work approximately 23 billion hours annually, earning around $785 billion in pay. They produce output worth about $2.4 trillion. In a hypothetical scenario where all human workers were replaced with robots working 16 hours a day, the manufacturing sector would need only about 5.9 million robots, half the current number of human workers, to maintain the same level of manufacturing output.

The humanoid robot industry is on the cusp of significant growth, offering substantial opportunities across various sectors. Understanding and tracking these key stocks can be crucial for investors in capitalizing on this emerging market. As technology evolves and the adoption of humanoid robots expands, keeping an eye on these developments could benefit future investment strategies.

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Cheers to wealth, wisdom, and a dash of madness!

The Investing Wise Academy Team

Disclaimer: This newsletter is for informational purposes only and should not be considered financial advice. Please consult with a financial advisor before making any investment decisions.