AI’s Biggest Waves Loom: Agentic & Physical
When it comes to highly complex topics such as artificial intelligence, investors are best served by listening to what the experts have to say. Over the past few decades, no one on Earth has made more correct predictions, created more millionaires, or produced more personal wealth than NVIDIA (NVDA) CEO Jensen Huang. One year ago, Huang correctly predicted that AI would move from the “Generative” (Chatbots like ‘Gemini’ & ‘ChatGPT’) phase to the “Agentic” phase (autonomous agents like OpenClaw).
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A Multi-Trillion-Dollar Opportunity
Huang describes the current “Agentic Inflection Point” as a shift in which software no longer just answers questions but autonomously completes entire human-like workflows, such as answering emails or customer inquiries without human assistance. Huang frames Agentic AI as a “multi-trillion-dollar opportunity” in which companies will deploy millions of agents to handle everything from customer support to software engineering. Meanwhile, Huang believes that in the next few years, “every industrial company will become a robotics company” as humanoid robots increase manufacturing efficiency and slash costs. Huang is not alone. Elon Musk believes that Tesla’s (TSLA) Optimus humanoid robot will eventually become his best-selling product ever and that, ultimately, there will be an even number of humanoid robots and humans.
What does this mean for AI companies? In the next waves of the AI revolution, hunger for compute and AI infrastructure will only proliferate further. For instance, Zacks Consensus Estimates suggest that Micron (MU), which produces critical computer storage technology for AI, will see year-over-year earnings swell 5x in the coming quarter and 4x for the full year 2026.
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Additionally, Wall Street analysts expect AI infrastructure companies like Nebius (NBIS) and IREN (IREN) to grow revenues at a triple-digit clip over the next two years. Also, it’s important for investors to note that while the next wave of the AI revolution has begun, the generative AI revolution is still attracting investment. For example, OpenAI and Anthropic have valuations of nearly $500 billion after their latest multi-billion-dollar funding rounds. In other words, the next two waves of the AI revolution will only add to the momentum of the generative AI revolution.
Historical Precedent Hints AI Buildout is Early
The internet boom of the late 1990s is the closest precedent that investors have to the current AI revolution. After the Netscape IPO in late 1995, the Nasdaq ripped 90%, found trouble 3 years in, then continued its rampage higher, finishing up 402% since the historic moment. Concurrently, the Nasdaq has ripped 90% in the three years since the ChatGPT debut, and recently hit some turbulence. Will history repeat? If the precedent holds true, there is a lot more room for the Nasdaq to move higher. (Source: Ryan Detrick, Carson Investment Research)
Image Source: Carson Investment Research
Tech Valuations are Attractive
Tech stocks remain extremely cheap. Today, the QQQ forward P/E ratio is 21.95x. For context, during the 2000 internet bubble peak, QQQ’s forward P/E was north of 100x!
Image Source: MacroMicro
The Market Shows No Signs of Froth
Bubbles end when investors are euphoric – not fearful. Currently, the U.S. stock market shows no signs of frothiness. For example, in 2000, there were 446 total IPOs on Wall Street. For 2026, analysts expect only 120 IPOs. Meanwhile, sentiment is extremely fearful. The latest AAII Sentiment Survey shows bears outweighing bulls 52% to 30.4%, marking the sixth consecutive week where bearish sentiment was the majority.
Image Source: AAII
Bottom Line
The convergence of Agentic AI and physical AI suggests that AI doomsdayers are early. While skeptics point to recent market turbulence as a sign of a peak, the underlying data and historical precedent tell a different story.
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Micron Technology, Inc. (MU) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Tesla, Inc. (TSLA) : Free Stock Analysis Report
IREN Limited (IREN) : Free Stock Analysis Report
Nebius Group N.V. (NBIS) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
