The First Pure-Play Humanoid Robot Stock Is About to Go Public. Here's What Investors Need to Know About Agility Robotics.

You're likely aware that the mainstreaming of humanoid, AI-directed robots is on the horizon. Indeed, CEO Elon Musk says Tesla's will begin mass commercial production of its so-called Optimus humanoid by the end of next year.

Tesla shares aren't an investment in advanced robotics, though. It's still first and foremost an electric vehicle outfit, and robotaxis feature as prominently as robotics do in Tesla's foreseeable future. And most other up-and-coming AI robot makers are either not publicly traded or aren't worth investing in, or aren't pure plays, either.

There may soon be one exception, however. A company called Agility Robotics -- maker of the humanoid robot called Digit -- will soon be going public. Here's what interested investors need to know.

The numbers we know so far

Robotics (including low-functioning robots) isn't exactly anything new. But Agility's Digit represents a major leap in robotic technology. The two-armed, two-legged automaton can lift up to 50 pounds, handling almost any basic task that a real person can. Although it's not going to be performing surgery or practicing law anytime soon, as of late last year, these robots had collectively moved over 100,000 totes within one of its customers' warehouses.

Image source: Agility Robotics.

Granted, having been a standalone entity since 2015, Agility Robotics has had time. The current version of its Digit android is this tech's fifth generation.

Yet, the company still lost $140 million last year on only $1.8 million in sales, while the $620 million it expects to raise through its upcoming merger with special-purpose acquisition company (SPAC) Churchill Capital Corp XI (NASDAQ: CCXI) implies a company valuation of $2.5 billion. It's a testament to the perceived value of more than a decade's worth of developmental work on a humanoid robot that's admittedly pretty amazing, even if not yet highly deployed.

Not yet highly deployed. But that day's coming sooner or later.

Agility is ready at the market's turning point

Agility's current customer list includes GXO Logistics, Toyota Motor, and German auto parts maker Schaeffler, with its humanoid robots now operating in nine different locations.

The company is going public at a time that's proving to be a major turning point for humanoid robotics in general, and for Agility Robotics' Digit in particular. Agility says it's got over $300 million worth of orders for the Digit 5 already lined up, while a recent outlook from Global Market Insights suggests the worldwide warehouse robotics market alone could grow by 23% per year through 2034, from less than $15 billion in 2024 to more than $117 billion by then.

The kicker: Agility Robotics' business model is designed to brilliantly capitalize on this growing demand. See, it's not just a designer and seller of advanced robotics. It's selling "robotics as a service," or RAAS. Assuming a five-year lifespan, each of these robots represents on the order of $400,000 to $500,000 worth of revenue to Agility. Moreover, that's still a net cost savings to the company's customers.

Its factory in Salem, Oregon, by the way, can currently manufacture on the order of 10,000 units per year. That's still not the scale that Musk is envisioning for Tesla's Optimus, but Agility Robotics is arguably taking more calculated aim at an industrial/goods-handling market with a more marketable work-minded solution.

What should investors do?

But is the public offering something worth at least attempting to participate in?

First (although not foremost), the upcoming offering isn't a typical initial public offering -- or IPO -- in the sense that the company will be selling newly issued shares of itself directly to its very first investors in exchange for predetermined amount of cash. There's no new offering at all, in fact. This company will be absorbed into the aforementioned Churchill Capital Corp XI, which will then become Agility Robotics.

Buying into CCXI shares today will give you a position in this company when the special acquisition actually happens, even though the official date for the completion of this transaction hasn't been announced yet. The usual speculation surrounding new and relatively unknown opportunities is still palpable, though.

While the implied $2.5 billion valuation makes no fundamental sense compared to $300 million worth of future sales (with no specific timeframe attached to that number, by the way), there's no denying there's opportunity ahead for autonomous manual-labor robots. Agility says nearly 2 million U.S. manufacturing jobs could go unfilled by 2033. It's just a question of when robots will start moving in earnest into the mainstream.

Some investors will price this stock like it's happening a week from now. Others will price this ticker as if it could take a decade. This stock is sure to waffle back and forth between these two extremes in the meantime, dishing out the same sort of volatility that shares of Space Exploration Technologies (aka SpaceX) have since the June initial public offering.

And that may be the most important takeaway here at this time. As much as investors might wish this stock would trade in a way and at a price that made some semblance of sense, that's not likely to happen anytime soon. All we know for sure is that, statistically speaking, most technology IPOs are down for the first several months following their public offering, largely thanks to the wind-down of their early but unsustainable bullish buzz. Only time will tell if that's how things will pan out for this particular SPAC.

Given the potential downside if that's in the cards, though, nobody should be in a big a hurry to dive into a big position early on and then hold on for dear life. If there are gains to be enjoyed here, Agility Robotics shares should produce them consistently once all the volatility of becoming a publicly traded outfit has run its course.

James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends GXO Logistics. The Motley Fool has a disclosure policy.