Investors are starting to understand that robotics and AI each represent an industry of industries. Not a sector. Not a theme. The foundational technology stack that every other industry increasingly depends on. In Q1, the market decided to stress-test that thesis, and the results tell a more nuanced story than the headline numbers suggest.
In this piece, we’ll recap what happened across both landscapes, highlight some of the quarter’s most consequential developments, and walk through the latest changes to the ROBO Global Artificial Intelligence Index (THNQ).
Amazon Goes All In On Physical AI
It would be easy to dismiss Amazon’s acquisition of Fauna Robotics as another big-tech acqui-hire, but It’s not. Fauna, founded in 2024 by former Meta and Google engineers, built Sprout, a consumer-oriented humanoid designed to be approachable and software-developer-friendly. This was Amazon’s second robotics acquisition in a single week (following Swiss delivery firm Rivr). It also signals what we’ve been writing about since the Cambrian Explosion piece in January: the humanoid robotics market is no longer a science project. It is a land grab.
Meanwhile, Amazon is reportedly in talks to acquire Globalstar for approximately $9 billion. A move that is less about satellites and more about spectrum. Globalstar holds globally harmonized, licensed orbital spectrum, a regulated asset that cannot be replicated. Apple already owns 20% of Globalstar and has reserved 85% of its network capacity for iPhone emergency services, making this a three-way negotiation between two of the world’s largest companies. For investors tracking the physical infrastructure layer beneath AI, this is one to watch.
The Personal AI Wave & Its Quiet Little Powerhouse
One of Q1’s biggest stories was the explosion of OpenClaw. The open-source autonomous AI agent went from being a side project to a global phenomenon in weeks. After drawing attention from everyone including Jensen Huang to Chinese state media. Tencent, Baidu, and others quickly built services on top of it. However, for our research, what matters most is what happened next. The robotics community adapted OpenClaw to control physical hardware almost immediately. Connecting to Unitree humanoids, robotic arms, and depth cameras, the AI chat agent essentially became a zero-code robotics orchestration layer. This is the kind of convergence between software intelligence and physical systems that expands the total addressable market for the robotics ecosystem.
A direct beneficiary of this new edge-robotics wave is Raspberry Pi, a well-loved small-cap in the AI and robotics community. The company has a holding in both the ROBO Global Robotics and Automation Index (ROBO) and the ROBO Global Artificial Intelligence Index (THNQ). It also beat full-year expectations across the board: revenue rose 25% to $323 million, its semiconductor division surged 47%, and shares returned over 40% for the quarter. As personal AI agents and embodied robotics move from labs to living rooms, the demand for affordable, versatile compute at the edge only grows.
Q1 Recap: A Broadening, Not a Breakdown
Both AI and robotics saw headline declines in Q1, with THNQ returning -7.5% and ROBO falling -2.3%. The pain in AI was concentrated in high-multiple software names with Big Data/Analytics and Business Process bearing the brunt). Meanwhile, semiconductor and photonic infrastructure holdings like Lumentum (+91%), Teradyne (+53%), and ASML (+24%) demonstrated that the buildout phase is far from over.
In robotics, six of eleven subsectors contributed positively, and several individual names posted standout quarters:
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Actuation led the way, with IPG Photonics (+60%) surging on demand for fiber laser systems across industrial and semiconductor applications, and Delta Electronics (+41%) benefiting from its growing role in AI power management and EV infrastructure.
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Manufacturing & Industrial Automation contributed positively, powered by Teradyne (+53%), which continues to benefit from dual exposure to AI chip testing and collaborative robotics through Universal Robots, and Coherent (+29%) riding photonic component demand.
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Sensing saw Cognex (+36%) rally as machine vision adoption broadened across factory floors globally.
ROBO held its own during a down quarter, and the outlook is only improving despite, if not further enabled by, hopefully temporary geopolitical turmoil. Global supply chain reshoring continues to drive automation demand, and AI is actively expanding the TAM for robotic systems into domains that were previously uneconomical.
The strategies, much like the space overall, are constantly evolving. As an example, the March rebalance reflects three additions and one removal from THNQ that speak directly to where we see the next wave of AI value creation.
THNQ Rebalance: Additions
Credo Technology (CRDO) – Credo is a pure-play on AI data center connectivity with its active electrical cables (AECs) solving a critical bottleneck. It enables high-bandwidth, low-latency GPU-to-GPU links inside AI clusters where reliability at copper’s physical limits is mission-critical. What makes also Credo especially interesting, is that it is not standing still. Its recent Hyperlume acquisition brings MiniLED-based optical interconnect technology into the fold. This positions the company at the transition point where electrical connectivity gives way to optical for longer-distance, higher-speed links. Credo now spans both sides of that transition, and the addition extends the photonics and optical interconnect theme we’ve been building out alongside Lumentum and Coherent.
Block (SQ) – Block may be the most compelling case study in AI-native enterprise transformation right now. Its internal AI agent handles approximately 90% of code submissions. However, the company cut headcount by 40% while raising 2026 adjusted operating income guidance 54% to $3.2 billion. AI is not a feature here, it is the operating system.
Robinhood (HOOD) – Robinhood has systematically embedded AI across its product suite through Cortex, an AI-powered investing assistant designed to become the primary interface for the entire ecosystem. Prediction markets, its fastest-growing product line by revenue, and personalized portfolio tools all run on AI-native infrastructure built in-house.
THNQ Rebalance: Removal
CyberArk (CYBR) – CyberArk was removed following the completion of Palo Alto Networks’ approximately $25 billion acquisition. The combination positions PANW to secure every identity (human, machine, and AI agent) across enterprise stacks. PANW remains in THNQ.
Looking Ahead
Q1 reminded the market that even the most powerful secular trends don’t move in straight lines. But the underlying story has not changed. Amazon is acquiring humanoid robotics companies. Open-source AI agents are being adapted to control physical robots. Companies like Block are demonstrating what AI-native operations look like at scale. And the hardware layer, from photonic interconnects to precision actuators, continues to see broadening demand.
Robotics and AI remain the industry of industries. The companies that build, enable, and deploy these technologies are positioned on the right side of the most consequential technological transition of our lifetimes.
ROBO is the underlying index for the ROBO Global Robotics & Automation ETF (ROBO), the L&G ROBO Global Robotics and Automation UCITS ETF (ROBO.LN), and the Global X ROBO Global Robotics & Automation ETF (ROBO.AU). THNQ is the underlying index for the ROBO Global Artificial Intelligence ETF (THNQ) and the L&G Artificial Intelligence UCITS ETF (AIAI.LN).
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Originally published on ETF Trends
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VettaFi is the index provider for ROBO ETFs, THNQ ETF, and AIAI.LN, for which it receives an index licensing fee. However, ROBO ETFs, THNQ ETF, and AIAI.LN 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 ROBO ETFs, THNQ ETF, and AIAI.LN.
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