Yesterday, the contrast of two headlines on the Wall Street Journal caught my attention…

• “Credit-Card Companies Brace for a Downturn”
• “$1 Trillion of Wealth Was Created for the 19 Richest U.S. Households Last Year”

From the first article:

There are some early warning signs. Consumers are holding off on nonessential splurges such as vacations…

Consumer sentiment has been sinking over the past couple months, fueling concerns that it will cause people to slow their spending.

And from the second:

The wealthiest have gotten richer, and control a record share of America’s wealth…

The growth in wealth of the richest Americans has far outpaced that of all other U.S. wealth groups.

Regular Digest readers are familiar with the term “Technochasm.” Originally coined by our macro investing expert Eric Fry, it describes the widening wealth gap generated from cutting-edge technology and AI.

For as expansive as it is today, the next handful of years will see it explode to a whole new level.

Behind the shift will be a next-gen technology that will transform businesses, homes, society…everything.

It will make day-to-day life far more convenient for some – but at a heavy economic cost for others.

For us investors, it’s important that we see what’s coming, enabling us to position our portfolios appropriately today. That will help us end up on the right side of the expanding Technochasm.

You can be aggressive and take focused, concentrated bets, looking for the multi-bagger winners – the “needle in the haystack”…

Or more conservative, opting for broader ETFs, following John Bogle’s advice of “Don’t look for the needle in the haystack. Just buy the haystack!”

Whichever approach is right for you, the takeaway is the same: It’s time to invest in “embodied AI.” Or as most people call it…

Humanoids.

In our April 16 Digest, we highlighted “the Real Winner of Trump’s Onshoring Push”

And who was it?

The companies that leverage robotics, and the investors who saw the writing on the wall.

This wasn’t a difficult conclusion to support.

Reshoring requires far greater payroll expense, real estate costs, and electricity/energy expense. And as it appears now, if CEOs don’t reshore, they’ll face massive tariffs.

This leaves corporate managers facing a tough tradeoff: eat those added onshoring costs at the expense of profit margins…or pass along those costs to customers at the risk of a drop in demand.

Enter a third option: Replace human workers with robots.

This makes for a much easier comparison…

Humans: massive salary expense, benefits expense, sick days, vacation days, human error on the job…

Robots: one time CapEx expense, marginal yearly maintenance expense, perfect job execution with no need for rest/breaks/benefits/and so on…

Barring policy guardrails, how does a push for onshoring result in anything other than an acceleration of the transition to robotics/humanoids?

Wrapping up that Digest, we quoted our technology expert Luke Lango:

The trade war may have lit the match. But the fire now spreading across this country is an economic one, unleashing a new 21st-century Industrial Revolution powered by AI, fueled by necessity, and backed by policy.

Let’s pick up where we left off.

The state of embodied AI today, and where it’s headed

Let’s go straight to Luke:

Thanks to the incredible advances in AI, robotics, and automation, we now have the technology to revolutionize American manufacturing right now.

Think humanoid robots that don’t just compute but physically act: walking, lifting, building, and problem-solving in the real world.

And this isn’t speculative anymore. It’s real. Consider:

• Tesla(TSLA) is leading the charge with Optimus, its humanoid robot that’s already performing tasks inside its factories.
• Nvidia(NVDA) just launched Project GR00T, a new suite of AI models built specifically for robotics use cases
• Meta(META) launched a humanoid AI division aimed at building the “iOS of robotics”
• Apple(AAPL) is investing in smart home robotics
• Alphabet(GOOG) is funding humanoid robotics startups like Apptronik
• OpenAIis exploring building its own robot
• Microsoft(MSFT) is backing Sanctuary AI, which just completed its first commercial delivery with a humanoid robot

Big Tech isn’t just watching. They’re investing aggressively

Below is a visual on what’s already here:

And this won’t stop with metal or plastic robots.

Mashable reports that Japanese scientists have coated a robotic finger in self-healing human skin – an enormous jump forward for humanoid technology.

(In the graphic below, pretend you didn’t read the closed captioning reference to a “Terminator”)

The scope of the coming age of humanoids is far bigger than manufacturing

In past Digests, we’ve featured how companies like Amazon and Walmart are increasingly shifting their warehouse operations to a robotic workforce. That will continue.

But warehouses and manufacturing plants are just the beginning. We’re not far from humanoids impacting our day-to-day lives in countless ways…

Households and Personal Assistance

Household robots are evolving from basic vacuum bots into multifunctional assistants. Get ready for your personal robot assistant to help you with everyday errands like picking up dry cleaning, meal prep, and walking the dog.

But it’s beyond that. The use cases involve functions that don’t readily come to mind.

For example, I occasionally invest in startups on Angel List. I just read about two different companies building robotics for the blind. One has created a robotic guide dog; the other a guide robot that appears more like a Roomba.

Elder Care

With global populations aging, humanoid robots are stepping in as round-the-clock companions. They’ll be helping seniors manage medications, stay socially connected, and remain mobile.

And it’s not just about taking vitals and dispensing pills. Some humanoids will exist for the purpose of social companionship – literally, reducing loneliness.

Social robots like ElliQ provide camaraderie for elderly individuals living alone. These humanoids can engage in simple conversations, offer reminders, and suggest activities.

Customer Service

Humanoid robots are already appearing in hotels and airports as receptionists, concierges, and information guides.

With natural language processing and facial recognition, they can personalize guest experiences, handle check-ins, and even serve food – all while never calling in sick.

Education

Educational robots can provide one-on-one tutoring, support special needs students, and offer engaging lessons using interactive media. Their consistency and adaptability make them ideal aides for teachers in both traditional and remote classrooms.

I could keep going, but you get the idea.

Humanoids are coming – and they’re going to impact everything.

Consider the spiderweb of investment implications

You have your Big Tech companies working on versions of a finished-product humanoid.

But think of smaller, components companies that are a part of that buildout.

Here’s Luke:

[Consider] AI chipmakers and sensor firms – companies that make the GPUs, LiDAR and vision sensors, and edge processors that enable real-world AI.

There’s also software platforms for robotics. Just like iOS for iPhones, there will be a winner in “robot OS”: platforms that help control fleets of machines in coordinated workflows.

But here too, this is just the start. Investing in humanoids represents a vast ecosystem that’s far too large to cover in one Digest.

So, how can you get started investing today?

We profiled the easiest way back in September.

Regular Digest readers will recall an issue in which I shared part of an internal email from one of our senior analysts, Brian Hunt, to a few members of our leadership team.

Brian described the technological advancements coming (like humanoids), the potential for market volatility, but the even greater potential to make enormous wealth over the next five to 10 years.

With that as our context, here’s Brian from that email with the most effortless way to ride this trend:

If you want to make it simple, easy, and powerful, just look up the five largest AI/robotics ETFs and buy them in equal parts and go to sleep for a while. Maybe throw in some QQQ. 

Ignore the corrections. They will be painful but temporary.

This tailwind will blow with hurricane force.

Now, Brian just described the “buy the haystack” approach to humanoid investing. If you prefer to look for the various “needles,” Luke recently put together a free research video in which he discussed his top robotics stocks for 2025.

And, of course, we’ll be bringing you some of the top ideas from our experts as this technology proliferates.

Perspective on timing

For as quickly as this technology is arriving, we remain a few years out from your kitchen humanoid grilling you a perfect steak while you watch reruns of “The Office.”

But iterative versions will arrive in the next 12 months or so. Think “agentic AI” that can book flights and hotels based on your calendar and preferences… proactively manage your subscriptions or utility bills… and even monitor your portfolio, moving money between your high-yield accounts and your trading account when positions get out of balance.

As to that steak, even though we’re a handful of years away, Luke urges action today:

If you’re an investor, this is your early-in moment…

Because we’re confident that in five years, everyone will be talking about robotics stocks the same way they talk about AI chip stocks today.

But by then, the easy money will have already been made.

You don’t have to go big. But it’s time to consider some starter positions in leading robotics/humanoids companies.

Circling back to The Technochasm

This is already a long Digest. So, we’re going to tackle this aspect of humanoids in an upcoming issue.

But for now, consider this: With humanoids being so capable, how deeply will that cut into our workforce?

Below is a list of jobs – hardly exhaustive – where humanoids be will able to accomplish many (or all) of the related tasks relatively soon…

Tutors, nurses, doctors, factory workers, forklift drivers, Uber drivers, lawyers, financial advisors, personal assistants, editors, customer services agents, telemarketers, accountants, data entry specialists, logistics operators, retail cashiers, truck drivers, security guards, pharmacists, market research analysts, legal assistants, and far more…

Now, if/when humanoids take over those functions, what happens to all that salary expense?

It remains on the balance sheets of the companies selling/utilizing humanoids/robotics, benefiting management and investors.

Might that exacerbate the contrast between the two WSJ articles that opened today’s Digest?

Loads of Americans turn to credit card debt…while a select few Americans watch their wealth explode.

More on this to come…

Have a good evening,

Jeff Remsburg