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Chip failure, robot run amok, will AI trading switch to "physical AI"?
The main investment line in AI in Asia is undergoing a significant shift. While chip stocks are under overall pressure, stocks related to robots and humanoid robots are experiencing a strong rally. "Physical AI" is beginning to replace semiconductors as the new narrative that funds are chasing in this round.
The most eye-catching stock performance this week was in Seoul - LG Electronics saw a cumulative increase of 55% over the week after news broke that it was collaborating with NVIDIA on humanoid robots, topping the list of gains in the core benchmark index in the Asia-Pacific region. In Japan, Fanuc's share price rose by 10% after it signed an AI industrial robot development agreement with Google, a subsidiary of Alphabet. In Hong Kong, China's Leidong saw its share price rise by as much as 150% on its first day of listing.
Nvidia CEO Jensen Huang has recently continuously characterized humanoid robots and autonomous machines as the next major computing platform following generative AI. Market research firm MarketsandMarkets predicted last month that the physical AI market will grow at an average annual rate of 47% and reach a size of $15.2 billion by 2032.
The rebound in robotics stocks reflects the evolution of the AI cycle from digital to physical deployment, said Gary Tan, portfolio manager at Allspring Global Investments. "Physical AI" is set to become the next growth pole in AI trading.
Individual stocks are taking turns to rally, and the Asian robotics concept is in full swing.
This week in the Asian market, several robot stocks were successively catalyzed by specific news, creating a dense resonance.
LG Electronics was the biggest winner of the week. The company's announcement of a partnership with Nvidia in the field of humanoid robots directly ignited the market, driving its share price up by as much as 55% over the week, making it the most outstanding individual stock in the Asian benchmark index.
After FANUC, the leading Japanese factory automation company, announced its collaboration with Google, a subsidiary of Alphabet, to jointly develop the AI capabilities of industrial robots, its share price rose by approximately 10%, confirming the market's imagination of the potential of combining top AI software with traditional industrial hardware. South Korea's Hyundai Motor also received a boost this week - it was reported that the South Korean military is exploring a strategic partnership with the company, with potential directions including the deployment of robot technology in military scenarios.
In the Chinese market, the shares of Ledomo Robotics soared by more than 150% on its first day of trading in Hong Kong, adding another significant footnote to the strong performance of the robotics sector this week.
NVIDIA continues to offer its support, and tech giants are strengthening their layout in physical AI.
The core driver of this market trend is the successive moves of NVIDIA and its allies.
Huang Renxun has increasingly defined humanoid robots and autonomous machines as the most important new computing platforms following generative AI in public appearances. This statement has provided a strong narrative endorsement for the valuation expansion of the entire robotics sector. The rumored collaboration between NVIDIA and LG Electronics on humanoid robots, as well as a series of previous cooperation news with other Asian robotics companies, have successively ignited the stock prices of related companies.
Google's cooperation agreement with Fanuc further validates this from another dimension - the combination of the world's top AI software capabilities and Japan's factory automation hardware advantages provides a specific implementation path for the AI upgrade of industrial robots, and also indicates that technology platform enterprises are regarding physical AI as an important strategic direction.
China, Japan and South Korea each have their own advantages and are competing in the physical AI race.
According to Bloomberg, in the regional competitive landscape of this sector, China, Japan and South Korea each have their comparative advantages and are all accelerating their layout.
China has established a relatively leading first-mover advantage. While continuously expanding its robot manufacturing capacity, the application of domestic humanoid robots is also frequently setting new records. On May 14th, the 2026 Second Hangzhou International Humanoid Robot and Robot Technology Exhibition officially opened at the Hangzhou Convention and Exhibition Center. The exhibition lasted for three days, with a 30,000-square-meter exhibition area gathering nearly 600 domestic and foreign enterprises such as Unitree and Tesla. Cutting-edge technological achievements including humanoid robots, core components, and brain-computer interfaces were showcased, vividly demonstrating the aggregation scale and commercialization process of China's embodied intelligence industry.
Japan, with its decades-long accumulation of profound experience in factory automation, is regarded by the market as a strong contender in the transition to physical AI. South Korea, on the other hand, aims to enhance the overall visibility of its AI industry beyond memory chips by leveraging the robotics sector. The potential collaboration between LG Electronics and NVIDIA, as well as Hyundai Motor's military robot development, all reflect this strategic aspiration.
Amid the upsurge, the challenge of implementation remains a key variable.
Despite the strong rally of robot concept stocks, many market insiders have cautioned that this trading is still in its early stages and the challenges in commercialization should not be overlooked.
"Physical AI has to deal with issues such as security, regulation, factories, supply chains and customer trust, which are far more complex than generative AI," said Charu Chanana, chief investment strategist at Saxo Markets. "My view is that this remains a future opportunity rather than an immediate scalable reality."
Apart from the uncertainty in the commercialization pace, robot-related companies also face the test of whether they can support their valuations with actual profits after a significant increase in their stock prices - this is a common challenge in high-growth sectors. The current strength of the Asian robot sector more reflects the market's expected pricing for the next AI growth pole. Whether the fundamentals can be delivered as scheduled remains the core variable that is still unresolved.
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