In this edition of the ETF Prime podcast, host Nate Geraci welcomed VettaFi Senior Research Analyst Zeno Mercer to discuss AI, autonomous vehicles, and robots. The pair reacted to Tesla (TSLA) unveiling a new robo-taxi as well as the company’s “Optimus” bot. Geraci also welcomed Hoya Capital CIO David Auerbach to discuss REITs. Hoya currently offers two REIT ETFs, the Hoya Capital High Dividend Yield ETF (RIET) and the Hoya Capital Housing ETF (HOMZ).

Geraci opened the conversation comparing the potential of TSLA’s new tech with a “George Jetson”-style future. Geraci gave Mercer the opportunity to pontificate on how close autonomous vehicles and robots are to being a reality. For Mercer, the technologies represent markers on TSLA CEO Elon Musk’s vision of “physical world autonomy.”

“This is actually something we look at at ROBO a lot: the utilization of mobility and assets,” Mercer said. “We live in a world where most cars are parked most of the time. They’re not being used, and even when they’re being used, maybe only one person is doing it, going one direction. So there’s a lot of single-purpose, not really high-utility things that are clogging up the streets.”

Robots, Robo-Taxis & TSLA

The new robo-taxi, Mercer explained, would represent a paradigm shift. The vehicle surprised some as a two-seater, he said. Mercer pointed to its flexibility and dexterity as the real highlight. He underscored other autonomous mobility firms like Toyota (TM) and Hyundai (HYMTF) as names to watch, as well. Prompted by Geraci for a time frame for autonomous vehicles, Mercer said that whether TSLA or a rival, a 2027 time frame has started “to feel a little bit more realistic.”

Perhaps more exciting online than the robo-taxi, however, was TSLA’s “Optimus” robot. Geraci asked for Mercer’s insight surrounding the robot not being autonomous. Mercer agreed that the bot relied on remote operation. He underscored, however, its dexterity and precision of movement.

“No, it wasn’t autonomous,” Mercer said. “For the robotics industry as a whole, we’re showing and proving that things can be done that were formerly considered kind of impossible.”

“I’m very hyped up and excited about home automation and smart homes and improving lives through physical automation,” he added. “It’s truly magic. By 2035, it’s very plausible that this will be a thing in people’s homes.”

Turning to the market impact, Geraci asked for Mercer’s take on TSLA and what kind of company it is looking to be amid this push. He cited a drop-off for TSLA’s value after the presentation as part of a broader question comparing its valuation to its market positioning. Mercer pointed out that while TSLA is pioneering in a lot of areas, it’s not the only firm working hard to innovate. Rivals including other firms in the so-called Magnificent Seven, but also abroad, are competing at the cutting edge of technology as well.

REITs & REIT ETFs

The podcast’s second segment focused on REITs, with guest David Auerbach. Geraci pointed out that REIT ETFs have “perked up” recently. He asked Auerbach for more detail as to why.

“No doubt, the Fed cutting interest rates has played into some of the rebound in the sector,” he said. “REITs are so compared to bonds that when you look at the performance right now, the REITs are generating what you would call historic levels of underperformance during that hiking cycle. We’re playing some catch-up right now.”

Auerbach explained that real estate is a very capital-intensive industry, with rate cuts easing some of that pain.