HAPPY SUNDAY TO THE STREET.
The S&P 500 just got a little more retail.
AppLovin $APP ( ▲ 10.03% ) and Robinhood $HOOD ( ▲ 13.96% ) will both be added to the index before Sept. 22.
Wall Street used to sneer at both names. Now they’re officially part of the benchmark.
— Brooks & Cas
THE NEXT BIG INDUSTRIAL ARMS RACE
Rise of the Machines
Humanoid robots: science fiction or factory floor?
Chinese robotics maker UBTech recently secured a $35 million contract for its Walker S2 model, the largest single humanoid robot order on record. And Tesla $TSLA ( ▲ 0.81% ) CEO Elon Musk further raised the stakes this past week, predicting that his company’s Optimus robots will eventually account for 80% of Tesla’s total value.
That bold call puts Tesla in the middle of a market shift that JPMorgan $JPM ( ▲ 0.18% ) says is accelerating toward real-world commercialization.
JPMorgan’s Picks
JPMorgan analysts pointed to contract wins and supply chain progress as evidence that humanoid robots are entering a new growth phase.
The firm rated four Chinese firms Overweight: UBTech, Sanhua Intelligent, Leader Drive, and Hengli Hydraulic. The bank’s price targets imply potential upside ranging from 20% to more than 50%.
The analysts wrote that 2025 “has marked a turning point for the humanoid robot industry, as order volumes and contract values have grown sharply.” In their view, market focus has shifted from research and development to delivery and application, opening doors for companies ready to scale production.
China in the Lead?
JPMorgan noted that Chinese firms may have an advantage over US rivals, particularly on pricing and commercialization speed. Earlier reports from CNBC also highlighted how manufacturers in China are moving faster to convert R&D into products deployed in industries like healthcare and manufacturing.
Still, competitive dynamics remain fluid. The field is crowded, and broader adoption may hinge on how quickly companies can demonstrate value in day-to-day use cases. But with Tesla’s attention and JPMorgan’s endorsement, humanoid robots may become increasingly difficult for investors to ignore.
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A SMALL CAP WITH BIG TASKS
Garbage In, Garbage Out
AI breakthroughs may look magical, but the quality of training data is often the deciding factor. Ridgefield Park–based Innodata $INOD ( ▲ 0.67% ) has built its business around that idea.
The company turns raw text, images, video, and sensor data into AI-ready datasets for some of the largest tech firms. With more than 6,000 consultants annotating and validating content, it positions itself as a key supplier of high-quality information for increasingly complex models.
Innodata’s roots stretch back 35 years in niche data services, but its pivot toward AI has driven rapid growth. Revenue has tripled in three years, and profitability has followed. Shares surged more than tenfold during that stretch before a recent correction, bringing the company’s valuation near $1.2 billion.
Scaling With the Giants
The company’s biggest customer contract expanded from $8 million in 2023 to a $135 million run rate this year. Management reported second-quarter revenue of $58.4 million, up 79% year-over-year, and net income of $7.2 million after a loss in the prior year. Full-year guidance now calls for at least 45% revenue growth.
Maxim Group analyst Allen Klee believes demand for training data should rise as computing techniques evolve, reiterating a Buy rating and a $75 price target. That implies a whopping 72.5% in potential upside from recent levels.
CEO Jack Abuhoff has also emphasized Innodata’s ability to handle high-volume, high-complexity projects that corporate clients may struggle to manage internally.
Dependence & Diversification
One challenge is concentration. Over half of its revenue in the past year came from just two customers, a reliance that management says it is addressing by expanding into new AI applications. Innodata highlights agentic AI — applications capable of initiating and completing tasks autonomously — as a future growth driver.
The company reports no debt, positive free cash flow, and a P/E ratio around 30, leaner than many small-cap AI peers.
Analysts still caution that weaker growth or shifting industry trends could weigh on the stock. But as enterprise AI adoption deepens, Innodata’s role in data trust and safety may keep it central to the conversation.
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PUTTING THE ‘GOLD’ IN GOLDMAN
The Fed Question
Goldman Sachs $GS ( ▲ 0.46% ) says political pressure on the Federal Reserve could reshape global markets — and send investors into gold.
Analyst Samantha Dart said damage to Fed independence may mean higher inflation, weaker long bonds, and pressure on the dollar’s reserve status.
These shifts could push traders toward safe-haven assets, potentially putting upward pressure on the spot price of gold.
Flight to Safety
The forecast comes as President Donald Trump moves to reshape the Fed’s board. His nomination of Stephen Miran and threats to remove Governor Lisa Cook have fueled speculation about the central bank’s future direction.
Gold has already gained nearly 6% since Miran’s nomination on Aug. 7. JPMorgan analysts described the move as a “Fed inflation trade,” pointing to a sharp rise in long gold futures positions.
They also noted that futures markets show evidence of investors hedging against policy interference. “Should private investors diversify more heavily into gold, we see potential upside,” Goldman added.
The Market Moves
Goldman projects gold could reach $4,000 per ounce by mid-2026, calling it the bank’s “highest-conviction long recommendation.”
The recent run in gold has coincided with modest shifts elsewhere. Since early August, the S&P 500 has risen just over 2%, while the broad dollar index has slipped slightly.
JPMorgan said these moves suggest growing unease about central bank independence. But a looming threat to the Fed might just be a golden opportunity for gold.
LAST WEEK’S POLL RESULTS
Are you bullish or bearish on Shoulder Innovations $SI ( 0.0% ) over the next 12 months?
▇▇▇▇▇▇ 🐂 Bullish
▇▇▇▇▇▇ 🐻 Bearish
And, in response, you said:
🐂 Bullish — “If something as life-changing as shoulder replacement can be done in an outpatient setting, eliminating the complexity of dealing with a formal hospital setting, it sounds like a significant streamlining of the procedure. I've personally seen how doing established, simple surgeries and medical procedures in outpatient settings can expedite the process and create a more personal response to your medical needs.”
🐻 Bearish — “Small market!”
Are you bullish or bearish on Ralph Lauren $RL ( ▼ 0.52% ) over the next 12 months?
▇▇▇▇▇▇ 🐂 Bullish
▇▇▇▇▇▇ 🐻 Bearish
And, in response, you said:
🐂 Bullish — “Classic and timeless is on tap for the year.”
Are you bullish or bearish on pharmaceutical stocks over the next 12 months?
▇▇▇▇▇▇ 🐂 Bullish
▇▇▇▇▇▇ 🐻 Bearish
And, in response, you said:
🐂 Bullish — “Market rotation. The field is undervalued.”
🐻 Bearish — “Class action is coming soon! Short all.”
