How to Invest in Figure AI Pre-IPO

With investors showing genuine interest in artificial intelligence (AI) businesses, it's unsurprising that Figure AI stock is on their radars. Founded in 2022, Figure strives to develop humanlike robots embedded with AI technology. The company doesn't mince words about its ambitions, stating, "Our product and our mission are one and the same: to bring a commercially viable humanoid to market."

The humanoid robot market is in the nascent stage of its development, but analysts expect the market to grow considerably in the coming years. Goldman Sachs (GS 1.26%), for example, projects that the total addressable market will soar to $38 billion by 2035.

Figure's founder and CEO, Brett Adcock, recognizes numerous applications for Figure's humanoid robots. From serving in corporate capacities, such as warehouses, to assisting with the elderly and even participating in space activities, Adcock imagines Figure can address labor demands that are currently unmet.

Investors may initially find the company's story appealing. However, they also need to know when it will hold its potential initial public offering (IPO) and whether any other investment opportunities exist.

Publicly traded?

Is Figure AI publicly traded?

As of April 2024, Figure was not a publicly traded company, so people interested in investing in the company must look for other options. Although Figure stock isn't available to most investors, several recognizable companies have picked up equity stakes.

In February 2024, Figure announced it had raised $675 million during a Series B funding round, valuing Figure at $2.6 billion and earning it unicorn status. Microsoft (MSFT -1.09%), OpenAI, Nvidia (NVDA -0.44%), Jeff Bezos, and ARK Invest, among others, participated in the funding round.

When will it IPO?

When will Figure AI IPO?

Having completed its Series B funding round, Figure had not disclosed any plans for a public offering as of April 2024. While investors may be disappointed that Figure isn't on the 2024 IPO calendar, a variety of other companies plan IPOs in 2024, leaving investors with plenty of other options to buy IPO stocks.

How to invest?

How to buy Figure AI stock?

Despite Figure being unavailable to most investors, people who qualify as accredited investors may be able to gain exposure to Figure before its IPO through a platform like Forge Global (FRGE 0.52%).

People who aren't accredited investors but whose interests are piqued at the prospect of buying Figure stock may be disheartened to learn that the investment option is unavailable. Still, there are other opportunities they may find appealing. Here's how to invest in those other options:

Step 1: Open a brokerage account

First, you'll need to open a brokerage account to buy stocks. Fidelity offers zero-commission online stock trades and is a great option for stock-buying newbies.

Step 2: Figure out your budget

Getting caught up in the excitement of purchasing a stock is easy, but you don't want to lose sight of your financial well-being. Consider your monthly expenses and savings goals, then decide the best approach to buying your stock. Determine whether you want to take a small position just to get some skin in the game, with the plan to buy more later, or you'd like to proceed with a single, larger purchase.

Step 3: Research related companies

It's time to do your due diligence and start investigating your various investment options. Although Figure may not be an investment option for ordinary retail investors, there are similar companies that may be attractive.

1. Nvidia

One of the most recognizable AI stocks on the market today, Nvidia, is an obvious choice for investors seeking an alternative to Figure. Since Nvidia participated in Figure's Series B funding round, providing a $50 million investment, investors can gain indirect exposure to Figure by buying Nvidia stock.

Nvidia is also exploring its own solutions for facilitating the development of humanoid robots. In March 2024, Nvidia announced Groot, which it characterizes as a "general-purpose foundation model that promises to transform humanoid robot learning in simulation and the real world."

Broadly speaking, Nvidia announced several solutions -- an upgraded Isaac platform, for example -- that are helping leading companies, like Boston Dynamics, Agility Robotics, and Figure, with model training in the pursuit of advancing humanoid robotics.

2. Symbotic

The company may not make robots in human form, but Symbotic (SYM 0.36%) is a leader in manufacturing AI-enabled robots that provide an autonomous solution to keep the supply chain moving. The value the company offers customers is hardly trivial.

According to Symbotic, its platform fulfills orders with 99.9999% accuracy, helping customers reduce operating costs. And we're not talking about small-time customers. In addition to Walmart (WMT -0.07%), Symbotic's customers include retail leaders like Target (TGT -1.23%) and Albertsons (ACI 0.55%).

Investors interested in the growth opportunity Figure represents may find Symbotic especially appealing. Over the next 15 years, Symbotic foresees a $144 billion available market. The company reported revenue of $1.2 billion in 2023 and a backlog of $23.2 billion in the first quarter of 2024.

3. Intuitive Surgical

Patients won't call these robots "Doctor." However, Intuitive Surgical (ISRG -0.34%) manufactures robot systems that assist surgeons in performing minimally invasive procedures in the operating room with its da Vinci surgical system.

Since doctors were first able to enlist the help of the da Vinci system, it has been used in more than 14.2 million urology, gynecology, and general surgery procedures performed in more than 9,100 hospitals worldwide. Intuitive announced in March 2024 that the Food and Drug Administration (FDA) granted clearance to its fifth-generation surgical system platform, da Vinci 5, which has 150 improvements over previous models, including greater computing power and force-sense technology.

Step 4: Place an order

Only a few final decisions to make, and you'll soon be an investor with a new stock in your portfolio. After you decide how many shares to purchase, you'll have to select the type of order you want to make: a market order or a limit order. Once these decisions are made, go ahead and click that buy button to complete your purchase.

Profitability

Is Figure AI profitable?

Because Figure isn't held to the same standards as publicly traded companies, investors don't have a true sense of the company's financial situation based on regulatory filings. Without a product on the market, however, it seems pretty safe to say that Figure probably isn't generating sales, let alone a profit.

But it may not be long before Figure starts collecting revenue. In January 2024, the company announced it had inked an agreement with BMW (BMWYY 0.59%). After it identifies how its humanoid robots can best assist BMW with its vehicle manufacturing, Figure will deploy its robots in varying stages to BMW's production facility in South Carolina.

Should I invest?

Should I invest in Figure AI?

Without holding an IPO, Figure is not an investment option for retail investors. If the company takes steps toward an IPO, it will be required to submit regulatory filings that will provide investors with a better sense of its financial situation, enabling them to make informed decisions about whether the stock is right for them.

Accredited investors, though, may be able to gain exposure to Figure right now. But since the company isn't generating revenue and its financial situation isn't well known, an investment in Figure should only appeal to people comfortable with substantial risk.

ETF options

ETFs with exposure to Figure AI

Since Figure isn't a publicly traded company, no exchange-traded funds (ETFs) provide exposure to the stock. But investors aren't completely out of luck. Some AI ETFs provide investment opportunities that will grab investors' attention.

• iShares Robotics and Artificial Intelligence Multisector ETF (IRBO 0.42%): For investors looking to keep their expenses low, this ETF is a great choice with its low 0.47% expense ratio. The ETF contains many semiconductor stocks that assist with AI leanings found in robotics. Arm Holdings (ARM 0.55%) and Nvidia represent the second- and third-largest holdings, respectively. True to its name, there are also robotics-focused stocks, like Intuitive Surgical and Cognex (CGNX 2.07%), a leading developer of machine-vision systems.
• Global X Robotics & Artificial Intelligence ETF (BOTZ 0.7%): People who want more concentrated exposure to industry leaders Nvidia and Intuitive Surgical may find the Global X Robotics & Artificial Intelligence ETF appealing. Nvidia is the largest position in the ETF, accounting for 9.1% of the ETF's assets, while Intuitive Surgical represents 8.2%. The ETF has a 0.68% expense ratio and makes semiannual distributions.
• ARK Autonomous Technology & Robotics ETF (ARKQ 2.46%): Interested in a more aggressive selection of holdings in your robotics ETF? This ETF is the answer. Cathie Wood's ETF includes industry stalwarts, like Tesla (TSLA 14.75%), the largest holding; and AI-focused semiconductor manufacturers, like Nvidia, Taiwan Semiconductor (TSM -0.19%), and Advanced Micro Devices (AMD 1.73%). But the ETF also holds a number of smaller growth companies, like launch services specialist Rocket Lab (RKLB 0.27%), drone manufacturer AeroVironment (AVAV 0.7%), and air mobility specialist Archer Aviation (ACHR 0.25%). The ETF has a 0.75% expense ratio.

Related investing topics

The bottom line on Figure AI

Considering the substantial growth that lies ahead for the humanoid robots market, it's no wonder investors are keenly interested in Figure. At this point, though, most investors will have to wait until the company holds an IPO before they can add the stock to their portfolios.

There are still several compelling options -- Nvidia, Symbotic, Intuitive Surgical, and AI and robotics ETFs -- investors can pursue while they wait for Figure to become publicly traded. While they wait, they can certainly follow the company's progress with its BMW deal and any others that become public.

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