The AI and robotics sectors faced an indiscriminate selloff in recent months that punished strong companies alongside weak ones, creating what industry experts describe as a genuine disconnect between market prices and underlying business momentum. While broad market sentiment has wavered, manufacturing and operational tailwinds suggest current valuations may not reflect the sector’s actual demand trajectory.
Key Takeaways
- Celestica doubled its 2027 revenue outlook to approximately $40 billion. Despite the gain, shares fell amid investor jitters that the trade is ending.
- U.S. factory construction continues at a $200 billion annual run rate compared to its historical $70 billion baseline, with PMI expanding for nine straight months.
- Targeted strategies tracking specialized benchmarks, including the ROBO Global Robotics and Automation Index ETF (ROBO ) and the ROBO Global Artificial Intelligence ETF (THNQ ) are capturing edge technology and manufacturing growth.
Underlying Business Momentum Defies Market Skepticism
Celestica (CLS) exemplifies this paradox where companies raise production forecasts even as markets sell them off, according to Zeno Mercer, head of AI and robotics research at VettaFi.
The company, which manufactures networking equipment for data centers, recently raised its 2027 revenue outlook to approximately $40 billion. Despite effectively doubling expectations, its stock declined amid broad investor nerves that the trade is ending.
The disconnect extends beyond data center plays. Phonic (TPE: 3067) reported record-high orders and sales, yet its stock fell. "There’re a lot of things that don’t really make sense right now,” Mercer noted, pointing out that manufacturing demand is climbing across the globe.
For the past several years, factory construction in the U.S. has sat at a $200 billion annual run rate versus a historical $70 billion baseline, according to Mercer. Additionally, machinery orders and industrial equipment investment hit all-time highs, and PMI has expanded for nine consecutive months.
Recent industrial data reinforces this momentum: North American robot orders climbed 24.8% year over year in the third quarter of 2026 to 10,989 units valued at $723.5 million, according to the Association for Advancing Automation. The surge marks the strongest quarter of the year, led by semiconductor, electronics, and automotive component suppliers accelerating their automation adoption.
Index Additions Expand Beyond Data Centers
This disconnect creates opportunities within dedicated investment strategies such as the ROBO Global Robotics and Automation Index ETF (ROBO ), which tracks the ROBO Global Robotics and Automation Index, and the ROBO Global Artificial Intelligence ETF (THNQ ), which tracks the ROBO Global Artificial Intelligence Index. Both indices continue to add companies that provide critical exposure across the entire technology stack.
New additions to the index underlying ROBO include Global UniChip (3443:TAI), a design partner to Taiwan Semiconductor Manufacturing (TSM). The company provides exposure up and down the stack, extending beyond hyperscalers into broader robotics and AI applications.
Meanwhile, the index underlying THNQ recently added Ambiq Micro (AMBQ), an edge-technology provider whose chips run at sub-power thresholds — operating at two and a half times lower power than competitors. Ambic Micro enables low-power AI, data collection, and extended battery life for wearable products like Garmin, Fitbit, and Whoop, while expanding into industrial lightweight edge systems and long-duration medical devices.
Mercer emphasized that many AI and robotics names have no direct tie to data centers and instead benefit from open-source tools and cheaper energy. With valuations for robotics and AI trading at a discount compared to earlier in the year, Mercer said price discovery should eventually normalize valuations upward.
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vettafi.com is owned by VettaFi LLC (“VettaFi”). VettaFi is the index provider for THNQ and ROBO, for which it receives an index licensing fee. However, THNQ and ROBO are not issued, sponsored, endorsed, or sold by VettaFi. VettaFi and its affiliates have no obligation or liability in connection with the issuance, administration, marketing, or trading of THNQ and ROBO.
