Check these leaders in autonomous vehicles.
Autonomous vehicle technology is one of the few tech fields that is generally considered a can’t-miss long-term opportunity for investors. In the past couple of years, companies have launched the first fully driverless autonomous public vehicle services on public roads in Arizona and California. At this point, the AV technology race is still in the first inning, and early investors who bet big on the eventual AV market winners could generate tremendous long-term returns. Guidehouse Insights has ranked these seven public companies as being AV market leaders based on 10 different criteria, including vision, technology and commercial readiness.
Alphabet’s AV technology subsidiary Waymo made history in October 2020 when it launched the first fully autonomous ride-hailing service in the U.S. Waymo’s initial service was available only in the Phoenix area. However, Waymo said in March that it plans to expand its public service to the San Francisco area, where it has been testing its driverless cars for more than a year and a half. Waymo is just a small part of Alphabet’s massive business. But a 2021 fundraising round reportedly valued Waymo at roughly $30 billion, about half the market cap of Ford Motor Co. (F).
Nvidia Corp. (NVDA)
Nvidia isn’t an auto company, but the high-end chipmaker is developing cutting-edge artificial intelligence and AV technology solutions that could be central to the future auto industry. The Nvidia Drive platform gives developers necessary tools and algorithms for developing and improving autonomous driving software. Nvidia’s Drive Hyperion 8 computer architecture and sensor array will be included in Mercedes-Benz cars starting in 2024. Several major AV customers, including Cruise, Mercedes-Benz, TuSimple, Volvo and Zoox, are already developing AV technology using Nvidia’s Drive Orin computer system-on-chip hardware. AVs will require tremendous processing power, and Nvidia is well positioned to capitalize.
Ford Motor Co. (F)
When it comes to innovation, Ford is certainly putting its money where its mouth is. Bloomberg recently reported that Ford is considering investing up to an additional $20 billion in restructuring its business, on top of the $30 billion it previously announced for an investment in electric and AV technology through 2025. Ford has been testing self-driving technology in major U.S. cities as part of its partnership with Argo AI, the company Guidehouse ranks as third among AV tech leaders. Ford has a 40% ownership stake in Argo AI, and it plans to invest $5 billion in AV technology between 2021 and 2025.
Volkswagen AG (VWAGY)
German automaker Volkswagen is the second-largest global automaker by sales and also has a 40% ownership stake in Argo AI. In addition, Volkswagen was reportedly recently in talks to acquire the AV unit of China’s Huawei. In January, Volkswagen announced a new partnership with Bosch to develop self-driving technology suitable for mass-produced vehicles. The company plans to launch in 2023 so-called Level 2 functions that allow drivers to temporarily take their hands off the steering wheel. While Volkswagen develops its own internal AV system, its best exposure to AV technology for investors today may be its ownership stake in Argo AI.
Baidu Inc. (BIDU)
Guidehouse named tech giant Baidu as the AV technology leader in China. Baidu has partnered with state-owned automaker BAIC Group and plans to build 1,000 driverless vehicles over the next two years. Baidu has been testing AVs on public roads for several years, and its Apollo Go driverless taxi service is currently operational in seven cities. In November, Baidu said it plans to expand its Apollo Go to 65 cities by 2025 and 100 cities by 2030. Unfortunately for investors, BIDU stock is down by about 45% in the past year amid a Chinese regulatory crackdown on big tech stocks.
General Motors Co. (GM)
General Motors AV subsidiary Cruise made history in February when it became the first auto company to offer fully autonomous taxi services to the public in San Francisco. In March, GM announced a deal to buy out SoftBank’s stake in Cruise for $3.45 billion, bringing GM’s ownership stake in Cruise to 80%. Cruise’s latest fundraising round values the AV company at about $30 billion, or more than half the total value of General Motors. Like Ford, GM can use profits from its legacy auto business to fund its pledged $35 billion of investments in AV and EV technology through 2025.
Intel Corp. (INTC)
In March, chipmaker Intel filed for an initial public offering of its Mobileye technology subsidiary. Intel plans to maintain majority ownership of Mobileye following the IPO, which it hopes will unlock value for shareholders. Until investors can buy shares of the Mobileye IPO, owning Intel is the only way to get access to one of the top AV technology companies in the world. Israel-based Mobileye is currently testing autonomous vehicles in a number of major global cities, including New York, Detroit, Tokyo, Jerusalem, Shanghai and Munich, and has launched its first on-demand self-driving mobility service in Paris.
7 autonomous vehicle stocks to buy:
— Alphabet Inc. (GOOG, GOOGL)
— Nvidia Corp. (NVDA)
— Ford Motor Co. (F)
— Volkswagen AG (VWAGY)
— Baidu Inc. (BIDU)
— General Motors Co. (GM)
— Intel Corp. (INTC)
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Update 04/27/22: This story was published at an earlier date and has been updated with new information.