How to invest in humanoid robotics

Artificial intelligence has been one of the defining investment themes of recent years. Much of the excitement has centred on AI applications and the infrastructure powering it. Increasingly, however, attention is turning to what happens when AI moves beyond the data centres into the physical world.

One area attracting growing interest is humanoid robotics.

Companies including Tesla, Figure AI, Agility Robotics and Unitree are developing robots capable of performing useful physical work, while advances in large language models, computer vision and reinforcement learning are making them increasingly capable.

For investors, however, the story extends well beyond the robots themselves. This article explores what's driving the industry, where value may ultimately be created across the ecosystem, the different ways investors can gain exposure, and the key risks that could shape the industry's future.

What are humanoid robots?

Humanoid robots are machines built with a human-like form, typically featuring two arms, two legs, a torso and hands capable of gripping and manipulating objects.

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Unlike traditional industrial robots, which are designed to perform a single repetitive task in a controlled environment, humanoid robots are intended to perform a much wider range of physical tasks while adapting to changing situations.

Advances in artificial intelligence, computer vision and reinforcement learning are making this increasingly possible. Rather than simply following pre-programmed instructions, today's humanoid robots can understand commands, recognise objects, navigate unfamiliar spaces and interact with their surroundings.

So why make robots that look like us?

Companies aren't building humanoid robots simply because they resemble people. They're building them because the human body is an incredibly versatile general-purpose design.

Over millions of years, evolution shaped humans to navigate complex environments, use tools, manipulate objects and perform an extraordinary variety of physical tasks. Over centuries, we've designed much of our built environment around those same capabilities. Doors, stairs, tools, machinery, workstations and household appliances are all intended to be used by people. 

Rather than redesigning the world for robots, many developers are building robots that can operate within the world we already have. Humanoid robots can already open doors, climb stairs, use tools and operate equipment designed for people. If they can perform these tasks reliably and economically at scale, they could potentially be deployed into existing homes, factories, warehouses and workplaces with relatively few changes.

This is one reason many robotics companies believe a humanoid form factor is well suited to general-purpose robots capable of performing a wide variety of tasks across human environments. Robotic arms, wheeled robots and drones remain better suited to many specialised tasks. For example, no humanoid is likely to ever rival China's Chaifu CR5000-3700 industrial robot arm, which can lift an extraordinary five tonnes. But when flexibility across diverse real-world environments is required, a human-like form may offer significant advantages.

There are also psychological advantages. Research suggests people generally find robots with human-like features and movements more intuitive, relatable and easier to interact with, particularly in settings such as healthcare, aged care and customer service where trust and communication are important.

While most humanoid robots remain in the testing and early commercial deployment stage, companies are exploring applications across manufacturing, logistics, healthcare, aged care, retail, construction and eventually the home.

Why are investors paying attention?

The idea of humanoid robots is not new. The world's first full-scale humanoid robot, WABOT-1, was unveiled in Japan in 1973. What has changed is that several factors are converging to make the technology increasingly compelling from an investment perspective. Four stand out.

1. Demographics are driving structural labour shortages

Many developed economies are facing a significant demographic shift. People are living longer and populations are ageing, increasing demand for healthcare, aged care, logistics and other essential services. At the same time, birth rates are falling and growth in the working-age population is slowing or declining. Across the OECD, the working-age population (typically defined as those aged 20 to 64) is projected to decline by around 8% by 2060, with declines exceeding 30% in more than a quarter of member countries.

This creates a growing imbalance: more people needing goods and services, but fewer workers available to provide them.

These demographic pressures are already contributing to labour shortages, creating strong incentives to automate repetitive, physically demanding and difficult-to-fill roles. As these trends are expected to persist for decades, the long-term economic case for technologies that can supplement the workforce continues to strengthen.

2. Artificial intelligence is making general-purpose robots possible

Traditional industrial robots have been used in factories for decades, but they typically perform a single repetitive task inside carefully controlled environments.

Recent advances in artificial intelligence are changing that.

Large language models, computer vision, reinforcement learning and vision-language models are giving robots a much better understanding of their surroundings, allowing them to interpret instructions, recognise objects, adapt to changing environments and perform a broader range of tasks.

But AI doesn't just make robots more capable. It also changes how they learn, improve and share capabilities over time.

Every robot deployed generates valuable real-world data. Combined with advances in simulation and synthetic training environments, this creates a powerful feedback loop where real-world deployments improve the underlying AI models, making both existing robots and future deployments more capable through software updates.

This collective learning may prove to be one of humanoid robotics' greatest advantages. Think about learning tennis. You can spend a decade practising until your serve, footwork and shot selection become second nature, but you can't simply transfer that embodied knowledge to someone else. Every player has to build those skills through years of practice.

Humanoid robots could be fundamentally different. A newly manufactured robot can boot up for the first time already equipped with capabilities that took millions of hours of real-world experience, simulation and training to develop. As more robots are deployed, that shared knowledge can continue to improve, with new skills, refinements and software updates distributed across every compatible robot. Rather than every worker independently climbing the same learning curve, each new robot could begin where the last one left off.

3. Manufacturing is finally catching up

Building a capable humanoid robot has long been technically possible. Building one cheaply enough for widespread commercial adoption has been the bigger challenge.

That is beginning to change.

Many of the technologies underpinning electric vehicles, including batteries, electric motors, sensors, actuators and advanced manufacturing techniques, are now being applied to humanoid robotics. Companies such as Tesla, XPeng and BYD are leveraging expertise developed through EV production to help reduce costs and scale manufacturing. In many ways, the electric vehicle industry has unintentionally built much of the manufacturing foundation humanoid robotics now relies on.

At the same time, falling component costs and improvements in manufacturing efficiency are making humanoid robots increasingly economical for certain commercial applications. BofA Global Research estimates the bill of materials (BOM) cost of a humanoid robot could fall to US$13,000 to US$17,000 per unit by 2030 to 2035, driven by economies of scale and improved component design.

Governments are also encouraging greater automation and domestic manufacturing through industrial policy, while supply chain reshoring and labour shortages are increasing demand for flexible automation.

Taken together, these developments suggest humanoid robotics may be approaching an important commercial inflection point.

4. The potential market is significant

Large addressable markets often attract investor attention because they create room for multiple companies to grow and generate value across an entire ecosystem. While forecasts for humanoid robotics vary considerably, most point to a substantial long-term opportunity, reflecting different assumptions about adoption rates, pricing and technological progress.

Goldman Sachs estimates the humanoid robotics market could exceed US$38 billion by 2035. Barclays forecasts a market approaching US$200 billion over a similar timeframe, while Morgan Stanley estimates the long-term opportunity could eventually reach US$5 trillion, describing the broader global labour market as roughly a US$60 trillion opportunity.

Private capital is already moving in the same direction. According to McKinsey, venture capital investment into robotics more than tripled between 2023 and 2025, reaching approximately US$40.7 billion annually.

None of these forecasts should be viewed as certainty. Whether humanoid robotics ultimately becomes a multi-billion or multi-trillion dollar industry will depend on whether the technology can become reliable, affordable and commercially viable at scale.

Every robot needs a supply chain

When investors think about humanoid robotics, it's natural to focus on the companies building the robots themselves. But the AI boom demonstrated that value can emerge across an entire ecosystem, not just in the businesses creating the end product.

Much of the excitement around AI centred on models such as ChatGPT and Claude, yet these companies remained private and inaccessible to most everyday investors. Instead, many of the biggest listed beneficiaries were found further down the value chain. Nvidia supplied the chips powering AI models, while shortages in High Bandwidth Memory (HBM), a critical component used alongside those chips, helped drive a sharp re-rating in memory manufacturers such as SK Hynix and Micron. As demand outstripped supply, pricing power improved, margins expanded and earnings expectations rose sharply.

The lesson is that value wasn't created in one company or even one part of the industry. It was created across multiple layers of the ecosystem.

Could the humanoid robotics theme follow a similar path?

For investors, it's helpful to think about the industry in layers. At one end are the companies designing and manufacturing humanoid robots. Supporting them are businesses producing actuators, precision gears, sensors, batteries, semiconductors, software and industrial automation systems. Further downstream are the companies that will eventually deploy these robots across factories, warehouses, hospitals and other workplaces.

According to McKinsey, the challenge is no longer simply building robots that work. It's manufacturing them reliably, economically and at scale. That depends on a surprisingly complex supply chain.

McKinsey estimates actuators account for around 40% to 60% of a humanoid robot's bill of materials, making them the single largest hardware cost. Sensing and perception systems contribute another 10% to 20%, while compute and control platforms account for around 10% to 15%. Structural components, batteries and numerous other specialised parts make up the remainder. Because actuators represent the largest hardware cost, improvements in their performance, manufacturing efficiency or cost could have an outsized impact on the economics of humanoid robots.

As production scales, different parts of the supply chain may create different investment opportunities. If demand for specialised components grows faster than manufacturing capacity, suppliers could benefit from stronger pricing power and improving profitability, much like parts of the AI semiconductor supply chain during the recent AI boom.

Geography is a critical supply chain consideration with important geopolitical implications. The humanoid robotics ecosystem is heavily concentrated in Asia, spanning robot manufacturers, actuator producers, sensor companies, precision machinery firms and advanced materials suppliers. China has established itself as the dominant manufacturing hub, accounting for an estimated 90% of global humanoid robot shipments in 2025. This concentration raises important questions for investors around cost and scale advantages, Western efforts to build alternative supply chains, trade and technology restrictions, access to critical materials and components, and potential supply chain bottlenecks. At the same time, it also means many of the listed companies across the humanoid robotics value chain are found in Hong Kong and Japan, making these markets important gateways for investors seeking exposure to the theme.

Exactly where the greatest value will ultimately be created remains uncertain. But as the AI boom demonstrated, some of the biggest investment opportunities may emerge well beyond the companies building the final product.

How can investors get exposure?

There is no single way to invest in humanoid robotics. Investors can gain exposure through diversified ETFs, robot manufacturers, companies supplying the broader ecosystem, or by investing in businesses as they come to market through IPOs and other investment vehicles.

ETFs

ETFs can provide diversified exposure to the humanoid robotics theme, but approaches differ widely. Dedicated humanoid robotics ETFs offer more focussed exposure to the theme, while broader robotics and automation funds provide exposure to the wider robotics trend, with some holdings overlapping the humanoid robotics value chain.

Humanoid robotics ETFs: 

Broader robotics and automation theme:

Individual companies

Investors seeking more targeted exposure may also consider individual companies playing different roles across the humanoid robotics ecosystem. The examples below illustrate three broad layers of the investment opportunity.

Humanoid robot developers:

• UBTech Robotics (9880:HK) is one of China's leading humanoid robotics companies. Its Walker humanoid robots are already being deployed in industrial settings, making it one of the few listed companies focused primarily on humanoid robotics.

• Tesla (TSLA:US) is widely regarded as one of the most prominent names in the humanoid robotics race. Its Optimus robot combines Tesla's AI expertise with its manufacturing capability, and the company is already testing the robots inside its own factories.

• Xiaomi (1810:HK) has entered the humanoid robotics race through its CyberOne platform, leveraging expertise developed across AI, consumer electronics and smart manufacturing.

Supply chain and enabling technologies:

• Harmonic Drive Systems (6324:JP) manufactures precision strain wave gears used in robotic joints, making it one of the purest listed plays on a critical humanoid robotics component.

• Nabtesco (6268:JP) is a global leader in precision motion control systems and reduction gears, supplying components used across industrial and humanoid robotics.

• Ouster (OUST:US) develops lidar sensors used in robotics and autonomous systems, providing exposure to one of the technologies enabling robots to perceive and navigate complex environments.

• Teradyne (TER:US) owns Universal Robots, one of the world's leading collaborative robotics businesses, while also providing exposure to industrial automation.

• Rockwell Automation (ROK:US) is a global leader in factory automation and industrial control systems, providing exposure to increasing automation across manufacturing.

Adopters and beneficiaries:

• Amazon (AMZN:US) has spent years investing in warehouse automation and robotics. If humanoid robots become commercially viable, they could help automate more tasks across Amazon's fulfilment network, improving productivity and potentially supporting operating margins over the long-term.

• JD.com (9618:HK) has invested heavily in warehouse automation and smart logistics. If humanoid robots become commercially viable, they could become a natural extension of its increasingly automated fulfilment network.

Alternative ways to access the theme

• IPOs: Many of the most prominent humanoid robotics companies remain privately owned, limiting direct investment opportunities. As more humanoid robotics companies list publicly, investors are likely to have a broader range of ways to gain direct exposure to the sector. Several private humanoid robotics companies are reportedly preparing for public listings, with businesses including Unitree, Deep Robotics and Coowa exploring IPOs in Shanghai and Hong Kong.

• SPACs: Special Purpose Acquisition Companies also provide an alternative pathway to public markets for private humanoid robotics companies. Churchill Capital Corp XI (CCXI:US) has announced a proposed merger with Agility Robotics, the developer of the Digit humanoid robot. If completed, the combined company is expected to trade on Nasdaq under the ticker AGLT.

• Listed closed-end funds: offer another way to gain exposure to privately owned robotics and physical AI companies through a publicly traded investment vehicle. RoboStrategy (BOT:US), for example, invests in private companies including Figure AI and Standard Bots. This is similar to how some investors gained indirect exposure to SpaceX through publicly listed investment vehicles before its IPO. Unlike ETFs, however, closed-end funds can trade above or below the value of the assets they own, meaning their share price may not always reflect the value of the underlying portfolio.

While these structures may provide earlier access to emerging companies, they also carry additional risks, including deal uncertainty, valuation risk and higher volatility. Investors should conduct their own due diligence before investing.

The ETFs and companies featured in this article are available to trade through CMC Invest, alongside an extensive range of robotics, automation and AI-related companies listed across the US, Europe and Asia. Explore the theme and build your watchlist with CMC Invest.

Key risks investors should understand

While the long-term opportunity is compelling, investors should recognise that humanoid robotics remains one of the market's more speculative investment themes.

Building advanced software is difficult. Building intelligent machines that can safely and reliably operate in unpredictable real-world environments is significantly harder.

Companies must then make their way through what's often called the "Valley of Death", where the challenge shifts from proving the technology works to manufacturing it reliably, profitably and at scale. Producing a robot that works in a demonstration is one thing. Producing thousands of affordable, dependable robots that customers are willing to buy is another entirely.

Even if companies solve the engineering and manufacturing challenges, widespread adoption is not guaranteed. Businesses may readily deploy humanoids in factories and warehouses, where the economic case is clear and public interaction is limited. But adoption in homes, hospitals and other public-facing settings may prove slower. Safety concerns, regulation, labour opposition and simple consumer discomfort could all influence where robots are accepted and how quickly they are deployed.

History shows that even transformative technologies do not always deliver attractive investment returns. Solar power is a prime example. The technology achieved widespread global adoption and costs fell dramatically, yet intense competition, overcapacity, falling margins, and rapid change have made it a difficult theme for investors. The Invesco Solar ETF (TAN:US), a popular benchmark for the sector, illustrates this frustration well. It has delivered extreme volatility and strong short-term rallies but often weak or negative longer term returns compared to the broader market, with many investors experiencing significant drawdowns despite the industry's technological success.

Valuation is another important consideration. Markets often price in years of future success well before companies achieve it. Even businesses developing outstanding technology can disappoint shareholders if expectations become overly optimistic or commercial adoption takes longer than anticipated.

Finally, identifying the long-term winners may prove difficult. Large market opportunities attract intense competition, and humanoid robotics is already drawing investment from established technology companies, industrial manufacturers and well-funded start-ups. Today's leaders may not necessarily dominate the industry over the long term.

The bottom line

Humanoid robotics has the potential to become one of the next major investment themes of the AI era.

Advances in AI, improving manufacturing economics, ageing populations and rising investment are bringing the industry closer to commercial reality.

But technological breakthroughs don't always translate into timely or attractive investment returns. The greatest value may not ultimately accrue to the companies building the robots themselves, but to businesses across the broader ecosystem, from critical component suppliers through to the companies that successfully deploy them at scale.

The opportunity is significant, but so are the risks. Competition, execution, valuation and uncertain adoption mean this could become one of the decade's most exciting, yet most frustrating, investment themes.

Success may ultimately depend less on identifying a single winner and more on following technological developments, understanding the evolving value chain and adapting as the industry matures.

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