Jensen Huang Says the Next Wave of AI Is Physical. Forget Nvidia and Tesla, I’d Bet on These 2 Mid-Cap Stocks Instead.

Jensen Huang just gave Germany’s factories a wake-up call. At a recent investment conference in Berlin, the Nvidia (NVDA) CEO pushed the country’s industrial giants to move fast on artificial intelligence (AI). Huang believes the next phase of AI will happen in the real world — inside the robots, cars, and production lines for which Germany is famous. He doesn’t see software taking over manufacturing, saying that “electrons will never replace atoms.” To him, AI can instead make skilled manufacturers even better. Huang even described Germany’s decades of factory data as something that belongs to the nation, and said this moment is too big to miss.

​When I think about who benefits from physical AI, the obvious names come to mind first. Nvidia sells the chips and software that train and run these systems. Tesla (TSLA) is building its Optimus humanoid robots alongside its self-driving cars, and Alphabet’s (GOOGL) Waymo already runs driverless taxis in several U.S. cities. Amazon (AMZN) also uses robots across its warehouses, while Germany’s Siemens (SIEGY) supplies much of the factory automation Huang is talking about. But if AI is going to work with atoms, it needs machines that can see and move.