Nvidia is pushing hard into Physical AI — the kind of AI that operates in the real world through robots and self-driving vehicles — with products like Jetson Thor, DRIVE Hyperion, Cosmos, and Omniverse. Auto customers have spent roughly $8 billion on Nvidia AI systems over the past year. Meanwhile, rival AMD agreed to acquire World Labs for about $8.2 billion to bolster its own AI ambitions. Despite the buzz, physical AI still represents a small slice of Nvidia's business compared to its dominant data center division.
Nvidia trades at about 15 times expected fiscal 2028 earnings, while AMD sits at roughly 41 times expected 2027 earnings. Nvidia's automotive revenue grew 39% in fiscal 2026 but slowed to 6% growth in the latest quarter, reaching $604 million. The company now folds automotive into Edge Computing, which brought in $7.2 billion in Q2 fiscal 2027. Its data center business pulled in $89.0 billion last quarter, accounting for over 90% of total revenue.
Other companies are also making moves. Asana reported Q2 2027 revenue of $216.4 million and narrowed its net loss, yet the stock has dropped 26.1% over the past year. The company is relying on AI Studio and AI Teammates to turn things around. Lemonade saw Q2 2026 revenue jump to $294.4 million from $164.1 million a year earlier, but shares fell 38.8% from the start of 2026 as concerns about AI regulation and rising claims mounted.
In enterprise news, Kyndryl deepened its partnership with WPP and opened its first U.S. AI Innovation Lab in Dallas, aiming to shift toward higher-margin AI consulting work. Walmart continues to leverage AI to stay competitive in retail. On the policy front, California signed Assembly Bill 1979, which takes effect January 1 and bars AI from independently performing medical tasks like prescribing medications. President Trump also made a surprising declaration about the term
Key Takeaways
- Nvidia leads the Physical AI push with Jetson Thor, DRIVE Hyperion, Cosmos, and Omniverse, while AMD agreed to buy World Labs for about $8.2 billion.
- Nvidia trades at ~15x expected FY2028 earnings versus AMD at ~41x expected FY2027 earnings; data center revenue of $89B makes up over 90% of Nvidia's total.
- Asana's Q2 2027 revenue hit $216.4 million with improving margins, but the stock is down 26.1% over the past year despite AI Studio and AI Teammates push.
- Lemonade's Q2 2026 revenue grew to $294.4 million from $164.1 million, yet shares fell 38.8% from early 2026 amid AI regulation and claims concerns.
- Kyndryl opened its first U.S. AI Innovation Lab in Dallas and deepened its WPP partnership to pivot toward higher-margin AI consulting.
- California's Assembly Bill 1979, effective January 1, prohibits AI from independently performing medical tasks like prescribing medications or ordering tests.
- AI agents powered by ChatGPT Dots, ChatGPT Work, Meta Muse, and Gemini Spark are being used for daily chores like email management and airfare tracking.
- ECB's Philip Lane says rising AI investment is contributing to higher global bond yields and increased U.S. long-term borrowing.
- The U.S. runs a $7.6 billion monthly semiconductor trade deficit as AI data center demand drives chip imports far past exports.
- AI spending on capital goods rose 66% year over year, outpacing domestic semiconductor production capacity.
Nvidia leads Physical AI push as AMD buys World Labs
Nvidia focuses on Physical AI, which is AI that works in the real world, like robots and self-driving cars. Rival AMD agreed to buy World Labs for about $8.2 billion to strengthen its own AI efforts. Nvidia sells key tools for Physical AI, including Jetson Thor, DRIVE Hyperion, Cosmos, and Omniverse. Auto customers spent around $8 billion on Nvidia AI systems in a recent 12-month period. Still, physical AI remains a small part of Nvidia's business compared to its massive data center sales.
Nvidia stock offers affordable Physical AI exposure
Nvidia is valued at about 15 times expected fiscal 2028 earnings, while AMD trades at about 41 times expected 2027 earnings. Nvidia's automotive revenue grew 39% in fiscal 2026 but slowed to just 6% growth in the fourth quarter, reaching $604 million. The company now groups automotive under Edge Computing, which brought in $7.2 billion in the second quarter of fiscal 2027. Nvidia's data center business pulled in $89.0 billion last quarter, making up over 90% of revenue. The author recommends buying Nvidia for its data center business, with physical AI as a potential bonus later.
Asana shares fall despite stronger sales and AI push
Asana reported Q2 2027 revenue of $216.4 million and a smaller net loss than Q2 2026, improving its net margin from negative 24.6% to negative 18.1%. Despite these gains, the stock lost 26.1% over the past year. The company is betting on AI Studio and AI Teammates to drive growth and improve profitability. Skeptics worry about slower revenue growth, tough competition, and data privacy rules raising costs. Asana trades at $10.07 today, with some analysts seeing fair value above that level if AI products gain more traction.
Lemonade investors face steep losses from AI insurance bet
Lemonade shares fell 38.8% from the start of 2026, including dividends. The company's Q2 2026 revenue reached $294.4 million, up from $164.1 million a year earlier, and its loss narrowed slightly from $43.9 million to $43.4 million. Net margin improved from negative 26.8% to negative 14.7%, but the company still operates at a loss. Early warnings about rising claim costs, economic pressures, and AI regulation were overlooked. Lemonade trades at $46.46 today, and some analysts believe its AI-heavy insurance model could still deliver long-term value.
WPP AI expansion with Kyndryl opens Dallas innovation lab
Kyndryl expanded its partnership with WPP to modernize WPP's technology operations using AI. The company also opened its first U.S. AI Innovation Lab in the Dallas area to help clients redesign workflows and adopt AI at scale. This deeper alliance with WPP could push Kyndryl toward higher-margin AI consulting and platform work. The shift may reduce reliance on older, lower-margin infrastructure contracts. Analysts see this as a meaningful move that could reshape Kyndryl's investment story over time.
Walmart thrives in the age of artificial intelligence
The article explores how Walmart remains a major player as artificial intelligence grows. Big box stores are not dying out. Walmart is finding new ways to use AI technology to stay competitive. The piece was illustrated by Elias Stein.
Trump declares people who say artificial intelligence to be enemies of the White House
U.S. President Donald Trump stated that the White House considers people who use the term artificial intelligence to be enemies. The statement came as a surprising policy declaration from the administration. It reflects growing tension around how the term itself is used in government circles.
California law requires doctors and nurses to perform medical tasks instead of AI
A new California law called Assembly Bill 1979 bars hospitals from using AI to independently perform medical tasks like prescribing medications or ordering tests. Gov. Gavin Newsom signed the bill, which takes effect Jan. 1. It requires licensed professionals to keep independent judgment when AI tools help guide patient care. Assemblymember Mia Bonta carried the bill sponsored by the California Nurses Association.
8 annoying tasks you can give to an AI agent instead
This article explains how AI agents can handle annoying daily chores like checking airfare, managing emails, and tracking free trial deadlines. It describes tools like ChatGPT Dots, ChatGPT Work, Meta Muse, and Gemini Spark. ChatGPT Dots have their own cloud computer and can work between conversations. The article gives tips on getting started with ChatGPT Work and adjusting privacy settings first.
ECB's Lane says AI investment is raising global bond yields
European Central Bank chief economist Philip Lane said rising AI investment is contributing to higher global bond yields. He pointed to increased long-term borrowing by U.S. companies financing AI projects. Lane also noted AI activity supports international trade in semiconductor chips. He said the ECB will consider these effects when setting interest rate policy.
AI data centers push US deeper into foreign chip reliance
The US once had a trade surplus in semiconductors, but that changed due to AI data center growth. In 2026, chip imports far outpace exports, creating a monthly trade deficit of $7.6 billion. The US imported $15.4 worth of semiconductors in August against $7.8 billion in exports. AI spending on capital goods rose 66% year over year. Even with new US semiconductor factories, domestic production cannot keep up with demand for advanced AI chips.
Sources
- What Is Physical AI? Nvidia Is the Stock I'd Buy to Own It.
- What Is Physical AI? Nvidia Is the Stock I'd Buy to Own It.
- Asana Shares Slid Even Though Sales Rose
- What Lemonade Holders Got Wrong Before The Slide
- How WPP AI Expansion Will Impact Kyndryl Stock
- Why AI Loves Walmart
- Trump declares anyone who calls artificial intelligence "artificial intelligence" to be enemy of White House
- Doctors and nurses, not AI, must perform medicine under new state law
- 8 seriously annoying tasks you can hand off to an AI agent
- ECB’s Lane Says AI Investment Is Contributing to Higher Global Bond Yields
- The AI data center build-out has made the US more reliant than ever on foreign semiconductors
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