Jensen Huang has spent the past year repeating one number that keeps growing louder: humanoid robots represent a $40 trillion total addressable market for labor automation. That figure came up again on the Animal Spirits Talk Your Book episode on investing in the rise of the robots, where guest Derek Yan argued the opportunity is “potentially bigger” than EVs or smartphones. I have owned NVIDIA for more than 15 years, and Huang has never attached a figure this large to a single end market.
The physical AI thesis has two clean public-market expressions. NVIDIA sells the picks and shovels. Tesla is the pure-play humanoid bet. Wall Street is positioning around both, and the credibility bridge is already on the road.
Waymo rides and trillion-dollar capital commitments
Yan framed physical AI as digital AI given a body. Autonomous driving is another application of physical AI: those cars are autonomous robots. The Animal Spirits host described being blown away by his first Waymo ride. That experience is becoming common, and it is the proof point that the underlying perception, planning, and control stack actually works in the wild.
Yan said on the podcast: “when like trillion-dollar company want it happen, it’s very likely to happen.” Huang at NVIDIA and Elon Musk at Tesla are personally directing billions of dollars at this. That capital flow is the institutional tell.
NVIDIA: the compute layer under every humanoid
NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) is the platform vendor for physical AI. Huang announced Isaac GR00T N1 on the most recent earnings call, describing it as “the world’s first open fully customizable foundation model for humanoid robots.” Partners including Agility Robotics, Boston Dynamics, and XPENG Robotics are using Isaac simulation to train humanoids. Huang told investors: “Billions of robots, hundreds of millions of autonomous vehicles, and hundreds of thousands of robotic factories and warehouses will be developed.”
The financials back the platform story. Q1 FY2027 revenue hit $81.61 billion, up 85% year over year. Data Center revenue reached $75.25 billion, up 92% from a year ago, driven by Blackwell architecture demand and InfiniBand networking. Shares sit near $218 as of early June 2026. The forward P/E remains at 24x, a striking multiple for a company growing data center revenue at this clip. Analyst consensus sits at $296.81 with 61 analysts rating the stock a Strong Buy or Buy.
Tesla: the only public pure-play humanoid bet at scale
Tesla (NASDAQ:TSLA) is building Optimus production lines designed for 1 million robots per year at Fremont and 10 million per year at Gigafactory Texas. The Gen 3 unveil was originally targeted for Q1 2026 but has been pushed to late July or August 2026, with Musk citing competitive secrecy: “Competitors analyze it frame by frame and copy everything we do.” The FSD business is the existence proof: 1.28 million active FSD subscriptions, up 51% year over year, with Services revenue up 42% on a $22.39 billion top line.
The valuation tells the story. Tesla trades at a forward P/E above 380x with a TTM EPS of $1.10. Shares sit near $418 as of early June 2026. Prediction markets price a 14% probability of a Tesla Optimus release by December 31, 2026. You are paying today for a robotics ramp the crowd does not yet believe in.
What I am watching
If Huang’s $40 trillion figure is even directionally right, NVIDIA collects rent on every humanoid trained, simulated, and deployed. Tesla either delivers on Optimus and becomes something much larger than an automaker, or that forward multiple compresses violently. The Waymo ride that surprised the Animal Spirits host is the same reason Coatue trimmed mega-cap tech in Q1. The picks-and-shovels case looks cleaner today. The pure-play case offers the bigger payoff if Gen 3 Optimus ships at the volumes Musk promised. Both bets live or die on the same thesis: physical AI is real, and the trillion-dollar companies want it to happen.
Editor’s note: Stock price data for NVIDIA and Tesla, analyst consensus figures, and forward P/E multiples were updated to reflect early June 2026 market conditions. Tesla Optimus Gen 3 timeline was corrected to reflect the delayed late July-August 2026 unveil announced on the Q1 2026 earnings call.
Top Gaining Stocks
Top Losing Stocks