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In our Ask the Analyst series, Spaceship community members send in their questions about investing.

We were recently asked:

"What trends could be worth investing in next?"

We put it to our Spaceship Voyager Investment Team. Over to Jason Sedawie, Spaceship VP of Investments. Jason's response is general in nature and not personal financial advice.

“It’s a great question: What trends could be worth investing in next? It's worth answering honestly because the answer might surprise you.

A high-profile sector and a good investment aren't always the same thing. When something's attracting attention, money tends to pour in, new competitors pile on, and the very profits that made it exciting in the first place often get competed away.

In our experience, the businesses that tend to do well over the long run are the ones with a genuine "moat", a durable competitive advantage that makes it hard for rivals to catch up.

So rather than chase a hot trend, we try to find the part of a trend that has a moat, and then pay a sensible price for it. Often that's not the obvious headline name. Think the companies that make the power equipment behind an energy stock surge rather than power prices itself, the parts that keep aircraft flying rather than the airlines, or the dependable software silently powering the AI shift rather than the buzziest hardware names.

In our view, a trend can be very real and still be a poor investment if there's nothing stopping competitors from piling in, which is exactly why we look for moats.

With that lens, here's one of the most interesting trends we see taking shape, though keep in mind, as with any trend, investing comes with risk and returns aren’t guaranteed.

A trend taking shape: physical AI

AI models are improving so quickly that one of the biggest shifts underway right now is AI stepping out of our screens and into the physical world, robots and machines that can see, move, and work alongside people.

It's sometimes called "physical AI". What makes it really interesting is that it isn't one trend at all; it ties together three: robotics, energy, and storage.

Why robots, energy, and storage belong together

A robot is, in a way, a lot like an electric car. It needs a battery, motors, power electronics, sensors, and a "brain". And a big battery that stores renewable energy is similar technology without the wheels. So the same building blocks sit inside robots, electric vehicles, and the batteries that store clean power. As all three grow at the same time, the companies making those shared parts could see demand coming from several directions at once.

The part most people miss

In big technology shifts, the flashiest products aren't always where the steadiest long-term value ends up. As the saying goes, in a gold rush, selling shovels was often a better business than digging for gold.

With physical AI, the "shovels" are the companies quietly supplying what every robot, electric car, and battery needs, the sensors that let machines see, the precision parts that let them move, the chips that manage power, and the equipment that delivers it. The robot makers themselves are exciting, but there are a lot of them, they're expensive to build, and it's not yet clear who'll come out on top.

Why energy and storage sit at the centre

Right now, the single biggest thing holding robots back is battery life, many can only run for a couple of hours at a time. So real progress depends heavily on better batteries and storage.

That puts energy and storage right at the heart of the story, and it means companies in power and storage could benefit twice over: once from robots, and again from the broader move to electrify almost everything.

How we think about trends like this

This is exactly the kind of long-term, structural change our Where the World is Going (WWG) methodology looks for in portfolios including the Spaceship Universe Portfolio: backing quality companies positioned for where the world is heading, and holding them for years rather than chasing the headline of the moment. (For more information about the Spaceship Universe Portfolio, check out the Product Disclosure Statement (PDS) and Target Market Determination (TMD).)

One note of balance: trends this exciting attract a lot of hype, and not every company riding a trend turns out to be a good investment. Prices can be volatile, and some businesses won't make it — which is why we focus on quality and the long term rather than what's hot this month.

Keep in mind that past performance is not a reliable indicator of future performance and returns aren't guaranteed. You should seek personal financial advice from a professional such as a tax accountant or financial planner. If you're considering an investment, make sure you understand the risks and review the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD).

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