Quick Read
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Robotics is still new and most investors remain under-exposed
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It could become one of the biggest markets, even bigger than AI
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And this could mean a rally that overshadows even the AI rally
If you think AI will remain limited to white-collar spaces only, you may be making an even bigger mistake than white-collar workers did when they thought factory floors would be automated first.
The physical economy is far larger than the software one, and it’s already in the crosshairs of major tech companies. Elon Musk is the one directly going for it with Optimus robots, but you’ll likely have dozens of companies with similar robots in the 2030s. A good way to gain early exposure is by buying robotics ETFs. No one knows which company will dominate the robotics sector since it’s still too early, so ETFs that own the whole pie are better options today.
Let’s take a look at a robotics ETF trading at a discount.
An under-the-radar pick that is surprisingly diversified
The KraneShares Global Humanoid Robotics and Physical AI Index ETF (NASDAQ:KOID) is the first U.S.-listed ETF that is dedicated to humanoid robotics. Other robotics ETFs target the broader AI hardware segment of the market without touching on the actual businesses building robots.
You can buy individual robotics-adjacent businesses or picks-and-shovels stocks, but if your point is to have a stake in the potential Nvidia (NASDAQ:NVDA) of robots, KOID is your best choice since it casts the widest net.
KOID is a new ETF that has outperformed most of its competitors, including QQQ. Its holdings are surprisingly diversified despite the company’s focus on robotics, as it buys robotics stocks worldwide rather than U.S. tech stocks. It includes dozens of U.S., Chinese, Japanese, and European companies involved in humanoid robotics. The top holding is Credo Technology (NASDAQ:CRDO) with 4.39% of assets.
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This is a much better roster of stocks than that of the most popular robotics ETF, the Global X Robotics and Artificial Intelligence ETF (NASDAQ:BOTZ). BOTZ is top-heavy, with its 4 largest holdings accounting for ~36% of the ETF. This structure caused BOTZ to deliver -1.72% in year-to-date losses, whereas KOID delivered almost 18% in gains.
KOID will likely get a lot more popular
The ETF manages just $304 million in assets. It is still new, and it isn’t too expensive despite handling so many international stocks and being the first one in its niche. You pay $69 per $10,000, and I expect much greater inflow once the hype shifts from large language models to humanoid robots.
It’ll be a while before humanoid robots can do general tasks, but the addressable market is huge, and the impact will be far more visible. That could eventually power a rally much bigger than the ongoing one. KOID’s head start in this niche might make it among the bigger names, though all of this is still very speculative.
Robotics is set to surge
Morgan Stanley projects a $5 trillion humanoid robot market by 2050, with adoption accelerating at the end of the 2030s; it also forecasts global humanoid industry revenue growing at a 54% CAGR over the next decade and 1 billion humanoids by 2050. We are a very long way from 2050, but this is a very conservative estimate, given that many Chinese companies are already selling human-like robot companions.
Once companies figure out how to integrate AI models with these companion robots and put them to use, they could iteratively improve across a wide range of general tasks.
Goldman Sachs pegs the humanoid TAM at $38 billion by 2035 with 1.4 million annual unit shipments. Citigroup projects $7 trillion by 2050, with industrial payback periods as short as 36 weeks. All things considered, this is a massive up-and-coming market worth having exposure to.
How you should play KOID
If you are confident that the AI rally will eventually translate into a robotics rally, KOID is a solid buy. Not only that, the ETF is structurally safer in a way many don’t appreciate. Earlier selloffs, such as the one in the fall of 2025 and the one from late February to late March this year, had a surprisingly soft impact on this ETF.
Most ETFs built on speculative assets fell by 30% or more earlier this year, whereas KOID had a shallower drawdown due to its international holdings.
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