It’s the future we were promised…After all, it would be difficult to argue that being an avid consumer of science fiction doesn’t translate into at least some edge in tech investing. Over the long term, at least...Embodied AI has always been the end goal of AI. This is the purest implementation of “using AI to do actual things and increase productivity” that we mentioned in our last article about AI’s Second Phase. Now, it’s clear to us from the trend of investment and technology that robots are more of a “when” than an “if”. However, for the past couple years it’s been a difficult theme to play beyond the compute layer.Themes are fickle, perhaps you’re a massive genius that knew without a doubt that LLMs and the GPUs they run on would be the future in 2021. And you had to sit through a significant drawdown before AI was even in the conversation related to the price action of MAG7. There’s being early and there’s being wrong, sometimes they look very similar.So, as with all equity themes we author, we have to proactively answer the question: why now? Put simply, this theme inevitably concludes in a secular growth story for the companies involved, and a majority of those companies are trading at cyclical trough and experiencing an inflection point. It is currently the case that many of the companies with upside to robotics are trading at a depressed valuation in a brutal auto cycle, with analyst expectations doing what they always do at cycle lows (acting like it’ll be this way forever). Our Investment Thesis is simple: we see an environment where we can make up a basket of names that will have upside to the proliferation of robots (as they climb up the Industrial → service → domestic ladder). A significant majority of these names currently have estimates that, in true cyclical fashion, assume the cycle will stay the way it currently is forever. Far from pricing in even a hint of a robot-shaped right tail, they’re not even pricing in an eventual return to growth. Thi