During Nvidia’s (NASDAQ:NVDA | NVDA Price Prediction) Q4 FY2026 earnings call in late February this year, the company’s VP of Investor Relations said “Physical AI is here,” something that the company’s financials are also corroborating. That segment has already posted over $6 billion in annual revenue and is rising fast.
So what is this physical AI in the first place? Nvidia is allowing robots to apply AI in the physical world. AI is able to automate things in the real world instead of just automating Excel spreadsheets and code, but it can’t do everything just yet.
Four years ago, when ChatGPT came about, people were pointing out how ironic it was that the factory workers who were supposed to be automated first were instead the ones who retained strong job security, while white-collar workers saw the ground shifting beneath their feet.
Today, the same blue-collar workers expect permanent job security, while white-collar workers see a tense environment. They could be in for a reality check eventually.
Being blue-collar may not save you from AI
When people say that AI will displace white-collar workers and will create jobs elsewhere, this is true to some extent. The blue-collar sector is seeing a boom from AI, especially as displaced workers retrain and seek opportunities there. However, even doing data center work isn’t really a long-term sanctuary for job security.
I’m not saying that you’re going to see true AI autopoiesis (the ability to self-create and self-maintain) anytime soon, but it can come quicker than you expect.
Nvidia is now using its Omniverse platform and collaborating with companies like Foxconn to already create “digital twins” of factories. These prototypes are allowing engineers to train engineers virtually and then deploy them in the physical world.
AI will eventually seep into the blue-collar field in the coming years.
No blue-collar work is safe. Here’s why
If your blue-collar work is structured, happens indoors in climate-controlled environments, and is in a predictable layout, then it is likely vulnerable. Warehouse workers, assembly line operators, and truck and bus drivers are already starting to be displaced. Delivery drivers are also increasingly competing with curbside delivery robots.
On the other hand, if you are an electrician, plumber, HVAC tech, an auto mechanic, a roofer, a carpenter, or someone who works in a field requiring tactile reasoning in dark, cramped, dirty spaces, AI really can’t replace you in that messy world… But it’s still not safe.
That’s because these “AI-proof” jobs are going to be a magnet for people displaced by AI. More and more people are training to enter the trades, and you’re going to see tremendous amounts of competition.
The New York Times already reported stagnant blue-collar jobs, with the headline “Blue-Collar Work Has Plateaued, Narrowing Options for Young Workers“.
A bandaid, perhaps?
If you want to make the most out of AI before AI makes the most out of you, it’s a good time to invest. The data center capex boom is in full swing, with hyperscalers continuing to spend hundreds of billions. They’re likely going to spend trillions more in the coming years, and there’s no better way to benefit from this than buying AI hardware stocks.
The biggest one is Nvidia, and the edge it has over others is unparalleled.
Nvidia’s “Compute & Networking” segment generated just $4.46 billion in the calendar Q1 2023 quarter, before exploding to over $61.65 billion in the most recent quarter. That $6 billion “Physical AI” revenue could compound at a similar rate in the late 2020s or early 2030s.
You’re only paying 27 times forward earnings for Nvidia stock today. Sales are expected to grow at hypergrowth levels for the foreseeable future, so it’s still cheap. The PEG ratio is 0.47, which is cheaper than 95% of companies in the semiconductor industry.
I’ll buy and hold.
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