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    Why Fanuc (TSE:6954) Is Up 18.0% After Announcing Nvidia-Powered “Physical AI” Robot Partnership

    Simply Wall St·12/07/2025 04:34:40
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    • Earlier this week, robot maker Fanuc announced a partnership with U.S. chip company Nvidia to develop industrial robots powered by “physical AI,” lifting sentiment across Japan’s robotics names and helping the Nikkei 225 close at a multi-week high.
    • The collaboration highlights how advances in AI hardware and software are increasingly converging on factory floors, potentially reshaping how investors think about automation leaders like Fanuc.
    • Next, we will examine how Fanuc’s Nvidia-powered “physical AI” initiative may influence the company’s investment narrative and longer-term positioning.

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    What Is Fanuc's Investment Narrative?

    To own Fanuc today, you have to believe that its core strengths in factory automation, CNC controls and industrial robots can keep compounding steadily, even if growth runs slightly behind the broader Japanese market. The recent Nvidia “physical AI” partnership plugs directly into that thesis by tying Fanuc more closely to cutting‑edge AI hardware and software, which could refresh its product roadmap and support its premium valuation if customers adopt these systems at scale. In the near term, though, the main catalysts still look like execution against the upgraded FY2026 guidance, progress on the ongoing buyback and dividend increases, and order trends from global manufacturing customers. With the shares already pricing in high expectations and trading well above some fair value estimates, the partnership raises excitement but does not remove the risk of a setback if earnings momentum cools.

    However, investors should also recognise how much optimism is already priced into the shares.Exploring Other Perspectives

    Simply Wall St Community members currently see Fanuc’s fair value anywhere between ¥3,706 and ¥5,349, based on 2 independent models. Against that backdrop, the Nvidia “physical AI” tie‑up and Fanuc’s richer valuation give you a useful contrast between enthusiasm around new technology and the ongoing risk that slower growth or weaker orders could pressure returns, which is worth weighing before forming a view.

    Explore 2 other fair value estimates on Fanuc - why the stock might be worth as much as ¥5348!

    Build Your Own Fanuc Narrative

    Disagree with this assessment? Create your own narrative in under 3 minutes - extraordinary investment returns rarely come from following the herd.

    • A great starting point for your Fanuc research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
    • Our free Fanuc research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Fanuc's overall financial health at a glance.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.