5 Stocks to Buy and Hold for the Rise of Physical AI

Physical AI, which bridges today’s digitally focused AI to machines, robots, and devices that can interact in real-time, learning and adapting along the way, is the future of AI.

The critical takeaway is that the future of AI is here, today. While not widespread, technologies such as Automated Vehicles (AVs), warehouses, and business systems are in use and being developed into the next industry-disrupting technologies that investors can capitalize on.

And the gains will be made over the next few years due to the rapid advancement of technology. This is a look at some of the top names that are set to benefit from physical AI in 2025 and beyond. 

NVIDIA Will Always Be the Leader in AI

NVIDIA’s (NASDAQ: NVDA) advantages lie in its GPU technology, which unlocked the data center industry and subsequently AI, its first-mover advantage, and its aggressive strategy for developing its full-stack offerings and expanding into new verticals.

NVIDIA’s products and impact on physical AI will be tremendous because it all starts with the GPUs, models, training, and inference, and ends with the ecosystem of products built on them. 

Specifically, NVIDIA is working on numerous fronts within several industries to develop and build the infrastructure necessary for physical AI to operate, including automotive, robotics, and smart cities.

Regarding its growth outlook, the stock is undervalued relative to its long-term earnings forecasts and could potentially increase in value by 200% over the next decade. 

Advanced Micro Devices Brings AI to the Edge, Where Physical AI Thrives

Advanced Micro Devices (NASDAQ: AMD) struggled to match the pace with NVIDIA during the AI infrastructure boom, but is positioned to regain ground with physical AI.

Not only is it on the cusp of inflecting market share gain in the GPU and data center markets due to its superior memory and performance, but it's bringing AI to the edge.

The company’s Ryzen line is optimized with special neural processors or NPUs to facilitate AI experiences across a range of devices. The company produces other hardware and software solutions for physical AI that are critical to the industry.

Its stock price is also deeply undervalued in mid-2025, potentially gaining a high triple-digit amount within the next five to ten years.   

Tesla: Look Past the Image Issues And Toward the Future of AV

Tesla (NASDAQ: TSLA) faces challenges in 2025, including CEO Elon Musk’s tarnished image, sluggish car sales, macroeconomic uncertainty, and increased competition; however, it continues to generate profits and invest in the future.

The future, according to CEO Elon Musk, is AV and Tesla’s upcoming Cybercab release. It is a fully autonomous vehicle with no visible onboard controls, serving as the basis for what will be fleets of ride-share vehicles. 

The critical takeaway is that these cars are expected in 2026 and are not the only contribution to physical AI. The other noteworthy advancement is the Optimus robot, now performing tasks at a Gigafactory near you.

Tesla is highly valued in 2025 but appears undervalued when considering the long-term outlook, indicating a potential for a 100% increase.

Ambarella: The Eyes of Physical AI

Ambarella (NASDAQ: AMBA) recently completed a business refocus that has it set up to be the eyes of physical AI. Once a mere image processor, Ambarella now focuses on computer vision and edge computing.

Its semiconductor platforms and systems-on-a-chip enable high-resolution video compression and advanced analytics at the edge, facilitating real-time device-based decision-making in industries such as AV, aerospace, and the industrial sector.

The business turned a corner in 2024, returning to growth, and is expected to sustain growth at a high double-digit pace for at least the next ten years, while widening its margin.

It too is deeply undervalued based on its forecasts and multiples, with the potential to rise by 100%, assuming the forecasts aren’t too low. 

Symbotic Automates Supply Chains 

Symbotic (NASDAQ: SYM) is an AI/Robotic story years in the making. Its systems are used to automate supply chain infrastructure for giants like Walmart and Amazon, which lean heavily into the technology. 

Advancement includes end-to-end solutions that enhance or improve the supply chain at all levels. 

Its contributions to physical AI include robots and the platform to operate them, improving efficiency, speed, and accuracy while reducing emissions and space requirements.

The story in 2025 is about executing its backlog, which is tremendous at over $23 billion as of the spring 2025 earnings release. 

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