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A robot rocket in Shanghai… the rare earth choke point behind every humanoid… Home Depot’s warning on the consumer… why housing stocks are climbing anyway … and 抖阴最新版 changes his job after 47 years
Yesterday, a Chinese robot maker delivered one of the wildest market debuts in recent memory.
Shares of Unitree Robotics – the Hangzhou-based company whose backflipping, kung-fu-fighting humanoids have racked up tens of millions of views online – closed their first trading session up about 460%. The offering was oversubscribed more than 8,000 times.
But the underlying bet here isn’t on Unitree, it’s on the single biggest technological leap since the smartphone – the moment AI stops living in a chatbot and steps into a body.
For three years, the AI boom has played out on screens – text, images, code. The next phase gives that intelligence arms, legs, and hands, then turns it loose on the physical world. It will be the most consequential step in our economic evolution since the assembly line – and Wall Street is only beginning to price it.
The numbers related to what’s coming are staggering…
Morgan Stanley pegs the humanoid market at $5 trillion by 2050, with a robot workforce north of 1 billion units – rivaling India’s entire working-age population. Citibank thinks it could reach $7 trillion. And Elon Musk, never shy, calls Tesla’s (TSLA) humanoid “Optimus” potentially “the biggest product of all time.” He pegs its long-term revenue at $10 trillion and estimates eventual demand “in excess of 20 billion units.”
Tesla has already ripped out the Model S and Model X lines at its Fremont plant to make room for robots, and now describes itself, flatly, as a “physical AI company.”
So, the prize is almost unimaginably large. Which brings us to the problem…
Every one of these machines – Unitree’s, Tesla’s, all of them – depends on one ingredient that America’s chief rival controls
That’s the dynamic our technology expert Luke Lango, editor of , has been researching for months. In a recent piece highlighting this research, he opens with a history lesson.
In October 1973, Arab oil producers slapped an embargo on the United States. Prices quadrupled almost overnight. Gas lines stretched for blocks. Washington imposed a national 55-mph speed limit to ration fuel – and the shock helped kick off a decade of stagflation.
As Luke notes:
The embargo itself lasted barely five months. The lesson lasted 50 years: a critical dependency, concentrated in the hands of a rival, is a weapon waiting to be fired.
With robotics/humanoids, the chokepoint isn’t oil. It’s rare earth magnets – chiefly neodymium-iron-boron – that are packed inside every electric motor.
A single humanoid can carry dozens of those motors in its shoulders, wrists, hips and ankles, adding up to two to four kilograms of rare earth magnets per machine, sometimes more than an entire electric vehicle (EV). More robots means more motors… more motors means more magnets… and the supply sits almost entirely in China’s hands.
China produces roughly 90% of the world’s finished rare earth magnets, and it has already flexed that leverage – restricting exports during this year’s tariff standoff and blacklisting U.S. firms.
Washington has finally woken up, pouring billions into a domestic supply chain. Plus, defense rules now require contractors to phase out Chinese magnets by January 2027.
So, which companies will benefit from this push?
That’s a trillion-dollar question with one name high on the list – MP Materials (MP), the one U.S. company that can mine, refine, and turn rare earths into finished magnets at scale.
The Pentagon has taken a 15% stake, and Apple (AAPL) and General Motors (GM) have both signed magnet supply deals. The reason why is simple. As Luke puts it, “whoever supplies the magnets supplies the empire.”
But MP isn’t the only stock that’s poised to benefit here. I want to cover more ground in today’s Digest, but for a much deeper dive – plus a free, related stock pick from Luke – . If yesterday’s Unitree fireworks and the potential market size of robotics have your attention, I encourage you to .
The shape of the American consumer
Want to know how the American consumer is really doing? Watch what they’ll still spend on – and what they won’t.
This morning gave us the broadest read of all. Walmart (WMT), arguably the single best gauge of the American wallet, reported before the bell. Sales beat expectations, rising 5.9% to $187.9 billion – and yet the stock is down nearly 10% as I write.
The issue was the quality of the beat. It leaned on a nearly $3 billion tariff-refund benefit rather than real demand. Organic U.S. sales growth slowed, and management pointed to shoppers making “trade-offs” as higher prices and fuel costs bite.
That word – trade-offs – is a good description of what we’re seeing today on Main Street. The American consumer isn’t collapsing. But they’re choosing carefully: spending on what they must and deferring what they can.
And you could see those exact trade-offs earlier this week, in the two housing-related names that reported ahead of Walmart.
On Tuesday, Home Depot (HD) reported that sales rose 5.7% to $47.9 billion, while comparable sales grew 1.7%, beating expectations and reaffirming its guidance. Solid enough. But the color from management was more interesting than the numbers.
CFO Richard McPhail told CNBC that Home Depot is still operating in “frozen housing market conditions.” He described his customer as “a healthy cohort” – but admitted shoppers still haven’t returned to big-ticket projects. So, growth is coming from smaller jobs. The average transaction crept up 2.8%, even as the number of transactions slipped.
Lowe’s (LOW) reported yesterday. Sales climbed 8.3% to $26 billion, and comps eked out a 0.2% gain – the fifth straight quarter of positive comps. But the company missed on revenue and trimmed its full-year outlook to the bottom of its range.
The dynamics beneath the top-line numbers are the whole story. Here’s CEO Marvin Ellison:
Sustained growth in Pro, Online and Home Services led to our fifth consecutive quarter of positive comp sales, despite pressure in discretionary DIY spending.
There it is again – Pros and non-negotiable repairs are holding up. But discretionary do-it-yourself spending – the new kitchen, the bathroom remodel, the deck – is slow. Same trade-off, same cautious consumer: spend where you must, wait where you can.
We’re seeing this same “slowdown” dynamic bleed into new construction. Earlier this week, we learned that July housing starts cratered 12.4%, with single-family building falling to its slowest pace since November 2022.
Source: Fed data
Legendary investor 抖阴最新版, editor of Growth Investor, flagged that number in Tuesday’s Flash Alert podcast:
The July housing starts fell 12.4%. They’re running only at $1.24 million annual pace.
This is just a sign what higher interest rates do. Hurts the housing market, hurts anything that’s interest-rate sensitive.
So, the view from Main Street is shaky: a cautious consumer and a housing market frozen solid – which makes what I recently read from Senior Analyst Brian Hunt even more interesting…
Is it time to buy housing-related stocks anyway?
Brian, editor of Money & Megatrends, has been urging his readers to recognize a setup brewing in certain housing-related stocks – despite questionable macro data.
In his , he wrote something that every investor should remember for as long as they’re in the market:
The stock market is the world’s greatest forecasting mechanism. It tends to look ahead 6-12 months.
When an industry is in a recession, its stock prices will rise before the news media announces it is recovering. When an industry seems to be doing well, its stock prices will decline before the news covers its downturn.
This is often called “discounting” or “pricing in” the future.
What this means for investors is important – by the time the headlines confirm a housing recovery, the easy money will already have been made. The stocks move first. And in recent months, a basket of housing-related stocks has been moving.
A few weeks ago, Brian flagged a cluster of beaten-down housing-materials names that were quietly breaking out to multi-month highs – decking maker Trex (TREX), paint giant Sherwin-Williams (SHW), and insulation heavyweight Owens Corning (OC) among them.
Here’s Brian:
These economically sensitive firms are important “real world” indicators. They almost always do a better job of telling us what is happening in the economy than any media outlet or economist.
So, how do we square Brian with Louis, who just warned that higher rates are hurting anything interest-rate sensitive?
Easy – they’re watching different clocks. Louis is describing the pain right now, in today’s economy. Brian is reading what the market believes about the economy a year from now. Both can be right. And that gap between the grim present and the hopeful tape is exactly where forward-looking investors go hunting.
There’s a neat symmetry here, too…
Many of the materials companies Brian is watching are the same ones stacked on the shelves at Home Depot and Lowe’s – where Pro work and everyday repairs are holding the floor even as big discretionary projects stay frozen.
Here’s Brian’s overall take:
Can we start making money in the residential home business again?
The new, strong price action in many leading homebuilding materials and equipment suppliers implies that the answer to those questions is “YES.”
Bottom line: When stocks begin making multi-month highs in the face of underwhelming macro data, it’s worth noticing.
One last thing that brings us full circle
We opened today on the next chapter of the AI boom: intelligence stepping out of the chatbot and into a physical body. Let’s close on the boom itself.
Yesterday, our three AI heavyweights –Luke, Louis, and 抖阴最新版 of Fry’s Investment Report – went public with a project they’ve been working on behind the scenes for months: a ground-up rebuild of their .
The reason for the rebuild is simple…
Over the past year alone, these three experts have issued dozens of AI-related recommendations. That’s a lot of winners – but it’s also a problem. Which ones do you buy? How much goes in each? How do they fit together? And what are the top picks starting today, looking forward?
Owning the right AI companies, it turns out, is only half the battle. Rubber-meets-road implementation is a huge factor.
So, Louis, Luke, and Eric went back through their entire universe of AI research and distilled it down to – each with a recommended allocation. Not just what to buy, but how to build it.
There’s a personal headline here, too. After 47 years, Louis is changing his role. I won’t give away those specifics – it’s in the – but it’s significant.
If you missed it, the replay is up and available for a limited time.
We’ll keep you updated on all these stories here in the Digest.
Have a good evening,
Jeff Remsburg
(Disclosure: I own AAPL, WMT, HD.)
