These 3 Stocks Will Power Elon Musk’s Robotics Boom?

Summary

The video examines three semiconductor companies presented by James Altucher as potential suppliers to the humanoid-robotics and “physical AI” industry. The narrator’s central caveat is that robotics currently represents a small part of each company’s business. The investment cases depend more immediately on recovering semiconductor markets and growth in automotive, industrial, and AI-data-center demand.

Stocks and Financial Details

ON Semiconductor (ON)

ON Semiconductor makes power chips and sensors for automotive, industrial, data-center, and other electronics markets.

• Q2 revenue was about $1.6 billion. Its smart-sensor group contributed about $229 million, while automotive contributed about $781 million.
• The narrator says revenue grew 9% last quarter and free cash flow increased by $425 million.
• Its AI-data-center business is expected to more than double this year.
• The planned acquisition of Synaptics has a revised deal value of $5.7 billion. It is expected to close in mid-2027 and to be immediately accretive to adjusted earnings.
• At roughly $85 per share, the company’s valuation was about $33 billion.

View: The narrator calls ON the strongest buy of the three, citing improving results and AI-data-center growth. Risks include robotics’ small current contribution, cyclical semiconductor demand, and integrating Synaptics.

Allegro MicroSystems (ALGM)

Allegro MicroSystems produces magnetic sensors and power chips used to measure position, speed, and current, and to control motors.

• In its latest quarter, revenue was $259 million, including $165 million from automotive.
• Revenue grew 27% year over year; gross margin reached 48.5%; and adjusted EPS more than doubled to $0.23.
• Data centers reached a record 17% of sales.
• Robotics-automation revenue more than doubled in the prior year, though from a small base. The company is seeing more orders from humanoid-robot developers.
• At about $39 per share, its market value was around $7.2 billion, or about 7.5× trailing-12-month sales.
• The stock had fallen about 45% from its June price of $71.

View: The narrator considers ALGM a buy, but less attractive than ON. Its valuation assumes continued growth, while automotive remains its largest business and robotics revenue is not yet material.

STMicroelectronics (STM)

STMicroelectronics makes microcontrollers, sensors, and power chips for automotive, industrial, consumer-electronics, and other markets. The video links the company to motor-control technology and Nvidia’s Halos robotics platform.

• Q2 revenue rose 26% year over year to $3.49 billion. Automotive revenue increased 16%, and industrial revenue increased 34%.
• Gross margin was about 35%.
• Management expected Q3 revenue of about $3.7 billion.
• The company expected AI-data-center revenue to exceed $1 billion this year, with the possibility of exceeding $2 billion next year.
• At about $56–$58 per share, the company was valued at roughly $51 billion, or around 3.9× annual revenue.
• The stock had recently been near $80, about 30% above the cited current level. Annual revenue already exceeds $11 billion.

View: The narrator says STM is worth buying, while cautioning that its scale means robotics may take time to materially affect overall results. The valuation is also described as not especially cheap.

Investment Framework and Key Conditions

The narrator’s approach is to look beyond the robotics pitch and assess whether each company’s existing business and growth drivers can support the investment:

• Check whether semiconductor demand and the companies’ core businesses are recovering.
• Evaluate automotive, industrial, and AI-data-center sales, along with margins and earnings.
• Treat humanoid robotics as a potential long-term growth driver, not as established material revenue.
• For the robotics thesis to succeed, design wins and customer orders must eventually turn into meaningful production revenue.
• For ON, also monitor the Synaptics acquisition and integration.
• Consider semiconductor cyclicality and whether current valuations already price in substantial future growth.

Disclosures and Sources

The narrator promotes a free report on “10 best stocks to buy and hold,” available by submitting an email address. No explicit “not financial advice” disclaimer appears in the subtitles.

Presenters and sources mentioned: Dylan Rieger (narrator); James Altucher (the stock-promotion presentation and “infinite money glitch” claim); Nvidia, Tesla, and Morgan Stanley are also referenced.