It is quite possible the majority of the vehicles on our roads in the next decade will be autonomous, meaning self-driving without a human steering the wheel and pressing the pedals. Autonomous vehicles will be quite the disruptive force, especially considering the fact that the most common job in the country is truck driving.
Though autonomous vehicles will certainly put truck drivers, taxi drivers and Uber/Lyft drivers out of work at some point down the line, these self-driving vehicles will prove comparably safer. Furthermore, there is plenty of money to be made by investing in companies at the forefront of the autonomous vehicle revolution.
In particular, Tesla, Aptiv, Ambarella and VectoIQ Acquisition stand to benefit from the shift to autonomous vehicles.
Tesla (TSLA)
What is the first name that comes to mind when the subject of autonomous vehicle technology is raised? If you are like most people, you think of TSLA. TSLA is a POWR Ratings star with As and Bs in every category. All in all, TSLA is ranked second of 25 stocks in the Auto & Vehicle Manufacturers space.
The analysts have a high forecast of $1,100 for TSLA, meaning the stock likely has considerable room to move upward in the quarters ahead. A large part of TSLA’s appeal is the fact that it designs, manufactures and sells electric and autonomous vehicles on its own with an incredibly small advertising budget.
TSLA has a solid business model, an irreverent leader in Elon Musk and seemingly unstoppable momentum now that production is scheduled to resume at its Fremont, California factory. The fact that Musk’s SpaceX company successfully launched a couple astronauts into space last week is the icing on the cake. TSLA belongs in every investor’s portfolio.
Aptiv (APTV)
Investors looking to capitalize on the rapidly evolving automotive industry are on the prowl for trailblazing businesses with a multitude of technologies, products and services. APTV fits this profile. This company provides autonomous driving technologies along with active safety technologies, smart mobility solutions and vehicle components.
With an exemplary track record of either beating or meeting earnings expectations, APTV provides both value and considerable growth potential. APTV and Lyft have provided autonomous vehicle transportation for Las Vegas party-goers and residents since ’18.
APTV has also partnered with Hyundai to provide robo taxi services in the next couple years. The analysts have a high forecast of $90 for APTV, with 16 recommending investors buy the stock, three recommending investors hold the stock and none advising investors to sell.
The POWR Ratings have APTV ranked 12th of 50 stocks in its category, highlighted by a "B" Trade, Peer and Industry Rank grades.
Ambarella (AMBA)
Investors are looking for businesses with diversified revenue streams as a hedge against an unpredictable economy and society. AMBA is one such company. AMBA sells IP security cameras, AI cameras, consumer electronics and autonomous vehicle technology.
In particular, AMBA’s computer vision technology (dubbed SoCs) used in commercial vehicles, is especially important for autonomous vehicles. This tech empowers automobiles with both blind-spot visual detection as well as active driver marketing.
The POWR Ratings have AMBA rated as a "B" - Buy, with a strong B Trade Grade and a B Industry Rank grade. Currently priced at $57, AMBA has an average analyst price target of $63.
Look for AMBA to continue its upward ascent toward its 52-week high of $73.59 reached just prior to the Covid-19 pandemic.
VectoIQ Acquisition (VTIQ)
Ah, another blank check company. Can it get any more vague than that? Though VTIQ has a comparably broad goal of acquiring businesses and assets through mergers and acquisitions, it is worth investors’ attention.
VTIQ has quickly traded up from $10 to $34, largely due to its upcoming merger with Nikola Motor, a maker of electric semi trucks. Nikola has nearly 15,000 preorders for its electric tractor trailer vehicles, meaning it has the potential to follow in the footsteps of Tesla (TSLA). Production of those electric tractor trailer trucks will commence next year.
If the preorders are fulfilled, VTIQ will receive more than $10 billion in revenue across a couple years’ time.
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TSLA shares . Year-to-date, TSLA has gained 106.63%, versus a -2.69% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management.
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