Autonomous Car Stocks To Buy
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Autonomous vehicles, or AVs, are pretty self explanatory: vehicles that move without human control. The technology is extremely complex and is far from wide-scale adoption and rollout. Limited tests run in San Francisco with autonomous ride-hailing vehicles have already run into snags where cars lose touch with centralized servers, remaining frozen in streets. The technology relies on massive amounts of artificial intelligence and machine learning to smoothly operate. That said, the industry has the potential to revolutionize how people move by opening up parking spaces, streamlining personal transportation and potentially changing car ownership from personal to communal. These changes are alluring to consumers, and thus important to traditional automakers as well. Here's a list of the seven best autonomous vehicle stocks to buy now.
One of the first companies to buy into AV technology, Alphabet has been working on autonomous driving since 2009. Now the company owns Waymo, an electric vehicle, or EV, company that currently operates in Phoenix and San Francisco. While far from being commercially viable, the subsidiary continues to attract major investment interest, raising $2.5 billion last year during a round of funding. The same round of funding valued Waymo at roughly $30 billion, a stone's throw away from the market cap of Ford Motor Co. (F), which is worth around $45 billion at the time of writing. Now is the time to invest in tech behemoths like Alphabet since market downturns have put the company into value territory.
Nvidia is a high-quality chip and software company that makes the technology many automakers use to deploy autonomous technology. It is developing chips to be used for personal vehicles already on the market, and for complete AV commercialization. Nvidia is currently partnered with Mercedes-Benz to provide technology for its current vehicle supply, and the platform that Amazon.com Inc. (AMZN) subsidiary Zoox utilizes for its fully autonomous taxi service. Nvidia has a strong customer base of automotive partners, including Range Rover, Jaguar and Xpeng, and reported $566 million in revenue for fiscal year 2022 from its automotive department. That division should only continue to grow alongside the AV industry.
Tesla is at the forefront of autonomous vehicle technology. The company has long touted its hardware that comes standard with all Tesla vehicles, which is capable of providing so-called autopilot technology but is dependent on purchasing software upgrades for the vehicle. Tesla is on the road to becoming a major producer in the automotive industry, and is easily the most valuable carmaker in the world due to its massive potential. The company continues to report strong vehicle sales growth and production numbers: In the second quarter of 2022, Tesla delivered 254,695 vehicles, a 26% increase from the same quarter the year before. Tesla is also confident that its current new cars will be capable of full self-driving capability, pending regulatory approval. However, the company has recently hit snags with the technology as its self-driving software has come under fire from regulators amid alleged safety concerns.
Volkswagen has long sought to be a leader in new automotive technology, from developing new electric vehicles to now building autonomous technology. In fact, in 2020, Volkswagen vowed to invest $86 billion in electric and autonomous technology over the coming five years. Volkswagen has developed its own software to be used in its autonomous vehicles, which is called Cariad. And the company has partnered with Argo AI to further improve its proprietary software. Volkswagen estimates that it will soon realize $20 billion in revenue from the software-sharing initiative. The company reported last quarter that deliveries were down significantly to 1.92 million from 2.2 million a year ago. However, that shortfall was largely due to supply chain issues, and the company remains a global leader in automotive technologies. The current forward price-earnings ratio is 5.5, making Volkswagen look like an interesting value stock at current levels.
GM is arguably the furthest ahead in terms of AV capability. It aims to have a vehicle fully designed to be autonomous in production and use by 2023. And it was the first automaker to receive approval for fully autonomous testing of vehicles in San Francisco. People in the city can request and receive rides from the fully autonomous Cruise vehicles on the road. The integration of the technology will continue to become ingrained in other commercial and personal vehicles, through technology like adaptive cruise control, as GM sees its EV and AV technologies evolving together. The company's goal is to get its Cruise autonomous vehicle division to $50 billion in revenue by 2027. This additional revenue should also accompany high profit margins, dramatically increasing the value of the company if that pans out.
When looking at the broader stock market, autonomous vehicle (AV) stocks are likely on the minds of many investors. While the idea behind a driverless car is relatively simple to the human mind, the technology behind it is much more complex. It requires technological advancements in global positioning, digital mapping, computing power, and sensor systems working together to make autonomous driving safe. Furthermore, most autonomous vehicle companies pitch the idea of safer roads and a reduction of human errors while driving.
Elsewhere, Ford (NYSE: F) reported earlier this month that it has conducted a trial with a simulated autonomous vehicle at a container port in the UK. The trial aimed to help understand how existing processes and human interactions can work alongside automated vehicles. So, if you believe autonomous vehicles are here to stay, why not take a look at some of the top AV stocks in the stock market today.
Following that, we have a company that needs no introduction, Alphabet. Most people would know the company through its Google segment that includes Google Services and Google Cloud. But what some may not be aware of is, Alphabet also has a self-driving car project that was started more than a decade ago with the goal of driving autonomously. The project eventually became Waymo.
Organizations worldwide are looking to jump in on the emerging autonomous vehicle (AV) trend. Companies involved in autonomous transportation technology range from standard automobile players to innovative and exploratory tech companies.
Before buying any stocks, it is crucial to consider the industry outlook. An essential part of any investment is determining the potential for a profitable return on our investment (ROI). There is a lot to consider when it comes to the autonomous car sector.
Creating autonomous vehicles relies on an elaborate combination of advanced automotive design, high-quality materials, and cutting-edge technology. Companies capable of one, two, or all three of these skills are in high demand and make for good investment potential.
After coming to a better understanding of the autonomous vehicle industry and some of the key components at play, the next thing to determine is what individual companies represent the best potential. When considering autonomous car stocks, it is important to weigh the following:
Investing is not just about explosive growth potential; it is also about mitigating risk. When looking at individual stocks, consider companies in this sector that can be trusted and have a proven track record of success.
Unsurprisingly, Tesla is again emerging as a top player in the sector. As a leading innovator, Tesla represents one of the best driverless car stocks out there. One distinct advantage for Tesla is that they already have some semi-autonomous features, with vehicles currently on the market.
Drawbacks for Tesla include some recent product recalls, which have raised safety concerns. Some are also quick to point out that although Tesla presents their newest models as autonomous vehicles, they are actually only level 2 (partial autonomous) at the moment.
The company has maintained consistent growth and profitability and is among the most versatile stocks on this list because its technology is wide-ranging. An investment in Nvidia is not purely an investment in autonomous cars as their technology ranges to numerous other sectors as well.
General Motors is a well-established American automaker with a proven track record of over one hundred years of growth, innovation, and sales. Of all autonomous vehicle stocks on this list, I find this company among the most reliable.
Apart from being a household name, GM is proving to be a trailblazer in automobile innovation and technology. The company continues to adapt with the times, making it one of the best autonomous driving stocks.
Now the company is training its sights on autonomous cars, with plans to tackle all five levels of autonomy. Planning for a self-driving car division is still in the works, but it will be well worth keeping an eye on in the future
Xpeng is already manufacturing its own autonomous driving vehicles with smart in-car operating systems. The company has fully embraced lidar technology in its P5 electric sedan. The company looks poised to be a leading innovator in autonomous vehicle technology.
However, it is one of the more intriguing stocks for self-driving cars based on both short and long-term growth potential throughout China and internationally. Xpeng is already incorporating advanced AI technology in its designs and has proven itself a capable innovator thus far.
This is an exciting addition to the list of best autonomous vehicle stocks because it capitalizes on a whole separate industry. The technology can be a game-changer in the ride-hailing sector, streamlining existing services.
A potential drawback is that lidar technology can be quite expensive. For this reason, some automakers are hesitant to universally adopt it and are still searching for alternative AI technology in their autonomous designs. 59ce067264