In this article, we will discuss the 15 Best Self Driving Car Stocks To Buy Now.
While automation was a niche technology almost exclusive to the manufacturing side in the previous years, today, it has permeated into every industry. The automotive industry is one such industry where automation is having a long-lasting impact, as self-driven cars continue to attain immense popularity owing to their several benefits and unique advantages. The autonomous car industry sees bright aspects ahead, presenting the world with endless possibilities for improving living standards and enhanced convenience. It would serve to provide independence to elderly and physically disabled individuals. With an increasing focus on environmental safety in light of global warming trends, autonomous cars are bound to stay in the limelight with their ability to reduce traffic congestion and carbon emissions globally.
Key drivers for the industry will be a growing demand for a secure and convenient driving experience, inflating disposable income, strict safety regulations worldwide, and increased government mandates concerning driver-assistance systems. With further technological advancements contributing to the availability of appropriate infrastructure for the self-driving industry and growing government support for the industry globally, robust growth across the self-driving cars segment is expected in the future.
The global market for autonomous cars is projected to surpass around 65 million units by 2030 and swell at a CAGR of 13.38% from 2022 to 2030, according to a report by the US-based company Precedence Research, Inc. By 2030, the Asia Pacific region is anticipated to hold the largest market share in the self-driving cars industry, with an ever-increasing penetration, followed by Europe and North America.
An increasing number of companies are now directing their resources toward automated vehicles. Commercial adoption of self-run cars is underway as inclusive urban mobility, and sustainability principles are gaining ground worldwide. Key players in the autonomous car industry are General Motors Company (NYSE:GM), Apple Inc. (NASDAQ:AAPL), Alphabet Inc. (NASDAQ:GOOGL), and Mercedes-Benz.
Photo by ThisisEngineering RAEng on Unsplash
Our Methodology
To curate this list, we picked shares from iShares Self-Driving EV and Tech ETF and ranked them from #15 to #1 by the number of hedge funds holders in each stock in our database.
Best Self Driving Car Stocks To Buy Now
15. Autoliv, Inc. (NYSE:ALV)
Number of Hedge Fund Holders: 34
Autoliv, Inc. (NYSE:ALV) is a renowned developer, producer, and supplier of automotive safety systems with a diverse product offering. The company offers passive safety systems that comprise components and modules for frontal-impact airbag protection systems, side-impact airbag protection systems, seatbelts, inflator technologies, battery cable cutters, and pedestrian and cyclist protection systems. Autoliv, Inc. (NYSE:ALV) has approximately 65 manufacturing locations in 25 countries, and its customers include the world’s top automobile manufacturers. Autoliv, Inc. (NYSE:ALV) is developing external airbags for Nuro’s new third-generation autonomous delivery vehicle.
On October 24, 2022, Emmanuel Rosner, an analyst at Deutsche Bank, increased his price target on Autoliv, Inc. (NYSE:ALV) to $94. The analyst has a Buy rating on the stock and believes that the company’s Q3 results are encouraging and drive more optimism regarding the company’s production environment.
In addition to Autoliv, Inc. (NYSE:ALV), NVIDIA Corporation (NASDAQ:NVDA), QUALCOMM Incorporated (NASDAQ:QCOM), and Apple Inc. (NASDAQ:AAPL) are included in our list of 15 best self driving car stocks to buy now.
Autoliv, Inc. (NYSE:ALV) recently reported result for Q3 2022. Speaking on the results, CEO Mikael Bratt said in a statement:
Our strong performance in the third quarter is especially encouraging considering the market conditions continued to be challenging with almost 2 percentage points adverse currency effects, as well as significant inflationary pressure and high customer call off volatility. We generated a strong operating cash flow. The leverage ratio improved to 1.6 times. In the quarter, we paid $0.64 per share in dividends and repurchased and canceled 260,000 shares.
Our Q3 performance enables us to update our full-year indication for the adjusted operating margin to the upper-end of the indication. We expect continued sequential margin improvement in Q4 through price increases, cost reduction activities, as well as the higher LVP and engineering income. The Q3 performance and expected Q4 development strengthens our confidence in our mid-term targets. In addition, we expect that our balance sheet and positive cash flow trend will allow for higher shareholder returns.
14. Coherent Corp. (NASDAQ:COHR)
Number of Hedge Fund Holders: 36
Founded in 1966 in California, Coherent Corp. (NASDAQ:COHR) develops, produces, and markets engineered materials, optoelectronic components, and devices for use in end markets such as consumer electronics and automotive applications. The company’s advanced driver-assistance systems enable safe and autonomous driving. Coherent Corp. (NASDAQ:COHR) delivers laser sources, optics, and thermal-management solutions for sensors used in a wide range of system applications for short- to long-range object detection. The company’s VCSELs are essential in Lidar and sensing systems, which self-driving automobiles utilize to monitor the ever-changing environment data. The company’s revenue in fiscal 2021 stood at $3.1 billion.
On November 10, 2022, Richard Shannon, an analyst at Craig-Hallum, increased his price target on Coherent Corp. (NASDAQ:COHR) to $60. The analyst has a Buy rating on the company and stated that the company’s forward guidance and outlook of the operating environment remain robust compared to others as datacom revenues continue to drive strong results.
Carillon Tower Advisers made the following comment about Coherent Corp. (NASDAQ:COHR) in its Q3 2022 investor letter:
Coherent Corp. (NASDAQ:COHR), formerly known as II-VI, is a diversified technology company that provides optical components for telecommunications infrastructure products used in data centers and next-generation 5G networks. The stock pulled back due to macroeconomic concerns as well as due to its variable debt exposure, given the rising interest rate environment. However, the company’s management team remains committed to realizing acquisition synergies and paying down debt quickly, and has hedged nearly half of its interest rate exposure.
13. Aptiv PLC (NYSE:APTV)
Number of Hedge Fund Holders: 39
Aptiv PLC (NYSE:APTV) is an Irish-American multinational technology and mobility architectural firm primarily serving the automotive industry. The company provides end-to-end mobility solutions to its customers, allowing them to migrate to increasingly electric and software-defined cars. Aptiv PLC (NYSE:APTV) creates the software and hardware underpinning for vehicle features and functionality by designing and manufacturing vehicle components and providing electrical and active safety technology solutions to automotive and commercial vehicle companies. Aptiv PLC (NYSE:APTV) joint venture with Hyundai and Motional, Inc., continues to design and commercialize autonomous vehicles and systems. Motional announced IONIQ 5-based robotaxi, which will be available in 2023.
On September 28, 2022, Jared Maymon, an analyst at Berenberg, initiated coverage of Aptiv PLC (NYSE:APTV) with a Buy rating and a price target of $130. The analyst stated in the report that Aptiv PLC (NYSE:APTV) continues to capture additional market share as the focus on electric vehicles continues to increase.
Aptiv PLC (NYSE:APTV) was mentioned in the Q1 2022 investor letter of ClearBridge Investments. Here’s what the firm said:
The acceleration in electrification of transport should support electric vehicle (EV)-related stocks like Aptiv (NYSE:APTV), which came under pressure in the quarter on concerns the auto cycle is past its peak. Aptiv provides a range of solutions for the auto industry, including autonomous driving technologies, safety technologies, components, and wiring. The large exposure of APTV to EVs should lead to long-term value as EVs continue their growth, boosted by their relative attractiveness as prices at the pump hit near-historic highs.
12. ON Semiconductor Corporation (NASDAQ:ON)
Number of Hedge Fund Holders: 45
ON Semiconductor Corporation (NASDAQ:ON) is an American company that provides intelligent sensing and power solutions. ON Semiconductor Corporation (NASDAQ:ON) works in the autonomous vehicle’s sensor space providing Lidar tech, radar, and cameras. The company’s intelligent power technologies allow the automotive industry’s electrification, allowing for lighter and longer-range electric vehicles.
On November 15, 2022, Chris Caso, an analyst at Credit Suisse, initiated coverage of ON Semiconductor Corporation (NASDAQ:ON) with a Neutral rating and a price target of $83. The analyst stated that it is likely that the company’s stock will offer a better entry point in the first half of 2023, which is why he remains neutral for now on the stock.
Here is what ClearBridge Investments Mid Cap Strategy has to say about ON Semiconductor Corporation (NASDAQ:ON) in its Q3 2022 investor letter:
Our IT holdings also positively contributed to relative performance versus the benchmark. ON Semiconductor (NASDAQ:ON) was boosted during the quarter by high demand for auto semiconductors used in sensing and power management modules amid global chip shortages and tight supply chains.
11. Ford Motor Company (NYSE:F)
Number of Hedge Fund Holders: 47
Ford Motor Company (NYSE:F) is an American multinational vehicle manufacturer based in Dearborn, Michigan. Ford Motor Company (NYSE:F) develops, manufactures, markets, and services Ford trucks, sedans, sports vehicles, and electrified vehicles globally. It operates in three divisions: Automotive, Mobility, and Ford Credit. The Mobility division develops self-driving technology and designs and builds mobility services. Ford Motor Company (NYSE:F) purchased a majority stake in Argo AI, a self-driving car startup, in February 2017.
Ford Motor Company (NYSE:F) recently reported Q3 2022 results posting revenue of $39.4 billion, recording an increase of 10% YoY from the same period last year. The company posted a net loss of $827 million during the quarter as the company continued to be affected by supply-chain challenges.
Here’s what Leaven Partners said about Ford Motor Company (NYSE:F) in its Q3 2022 investor letter:
In our last quarterly letter, I briefly mentioned that the consensus estimates for corporate profits appeared to be a bit too sanguine. I referenced a Reuters article that reported, as of June 17, Wall Street expected S&P 500 earnings to grow by 9.6% in 2022, which was up from 8.8% in April and from 8.4% in January. That tune began to change at the end of July and accelerated in August and September, as major players, such as Ford (NYSE:F), has recently issued profit warnings and/or have withdrawn guidance. In response, Wall Street has altered its outlook: lowering third-quarter profit growth to 4.6%[2] from 7.2% in early August and slashing full-year profit growth to 4.5%.
10. Eaton Corporation plc (NYSE:ETN)
Number of Hedge Fund Holders: 47
Eaton Corporation plc (NYSE:ETN) is an American-Irish worldwide power management corporation that offers energy-efficient electrical, hydraulic, and mechanical power solutions. The vehicle segment of the company is responsible for the design, production, marketing, and supply of drivetrain and powertrain systems, as well as crucial components that reduce emissions and increase fuel economy, stability, performance, and safety in automobiles.
On November 02, 2022, Joshua Pokrzywinski, an analyst at Morgan Stanley, increased his price target on Eaton Corporation plc (NYSE:ETN) to $174. The analyst currently has an Overweight rating on the stock and believes that growth in Electrical Americas orders and a decrease in raw material prices could lead to an increase in stock price.
9. Albemarle Corporation (NYSE:ALB)
Number of Hedge Fund Holders: 49
Albemarle Corporation (NYSE:ALB) is a global leader in the designing, manufacturing, and marketing of highly tailored specialty chemicals for a wide range of end markets. The Lithium division creates lithium-based products for various sectors and end markets. Lithium is critical in many products and industries, including lithium batteries used in consumer electronics and electric vehicles. Albemarle Corporation (NYSE:ALB) posted a revenue of $3.3 billion in 2021.
On November 03, 2022, Albemarle Corporation (NYSE:ALB) reported results for the third quarter of 2022, posting revenues of $2.09 billion, an increase of 151% YoY from Q3 2021. The Normalized EPS of $7.50 beat the market estimate by $0.51.
Carillon Tower Advisers made the following comment about Albemarle Corporation (NYSE:ALB) in its Q3 2022 investor letter:
Albemarle Corporation (NYSE:ALB) is a global specialty chemicals company with leading positions in lithium, bromine, and refining catalysts. The company’s shares outperformed meaningfully in the quarter, driven largely by robust demand for lithium used to manufacture electric vehicle batteries. Albemarle is well-positioned for the accelerating adoption of electric vehicles and could benefit from the Inflation Reduction Act.
8. NXP Semiconductors NV (NASDAQ:NXPI)
Number of Hedge Fund Holders: 52
NXP Semiconductors NV (NASDAQ:NXPI) is a Dutch semiconductor firm with a wide range of products and services that include cryptography security and high-speed interface. Product solutions from the company are used in various end-market applications, including automotive, industrial & communication infrastructure. NXP Semiconductors NV (NASDAQ:NXPI)’s advanced driver assistance systems provide safe and increasingly autonomous experiences, which include radar, Lidar, vision sensing, and a V2X system. NXP Semiconductors NV (NASDAQ:NXPI)’s sales during 2021 stood at $11.06 billion.
On November 02, 2022, Christopher Rolland, an analyst at Susquehanna, reduced his price target on NXP Semiconductors NV (NASDAQ:NXPI) to $175. The analyst keeps a Neutral rating on the company’s stock due to concerns over a macro slowdown.
7. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 69
Intel Corporation (NASDAQ:INTC) is a multinational corporation that designs and sells computer goods and technology worldwide. In 2017, Intel Corporation (NASDAQ:INTC) acquired Mobileye Global Inc., which is a leading provider of driving assistance and self-driving systems. Mobileye Global Inc.’s product range includes computation platforms, computer vision, machine learning-based sensing, mapping and localization, and active sensors in development, covering the whole stack required for assisted and autonomous driving. Intel Corporation (NASDAQ:INTC)’s sales in 2021 stood at $79.0 billion.
On October 31, 2022, Tristan Gerra, an analyst at Baird, reduced his price target on Intel Corporation (NASDAQ:INTC) to $34. The analyst keeps a Neutral rating on the stock and believes that despite the slowing revenue growth, the company will be able to post the expected EPS in 2023.
ClearBridge Investments made the following comment about Intel Corporation (NASDAQ:INTC) in its Q3 2022 investor letter:
Also on the detractor side, Intel Corporation (NASDAQ:INTC) delivered a disappointing revenue miss and lowered full-year revenue and earnings guidance as COVID-19-driven demand for PCs abated (where Intel enjoys half its sales) and a delay in its flagship Sapphire Rapids CPU hurt its data center business. Despite these issues, we still believe Intel is an economically sensitive turnaround story with substantial upside.
6. General Motors Company (NYSE:GM)
Number of Hedge Fund Holders: 74
General Motors Company (NYSE:GM) is an American automaker that designs, manufactures, and sells trucks, crossovers, cars, and automobile components, as well as software-enabled services and subscriptions worldwide. Cruise is the company’s global segment responsible for developing and commercializing software and hardware autonomous car technologies such as light detection and ranging sensors and other components. General Motors Company (NYSE:GM) revenue in 2021 was reported at $127.0 billion.
On October 26, 2022, Ryan Brinkman, an analyst at JPMorgan, increased his price target on General Motors Company (NYSE:GM) to $59. The analyst kept an Overweight rating on the stock and stated that the strong performance in Q3 shows the strength of the company in the current macro-environment.
Oakmark Funds, an investment management firm, has released its first-quarter 2022 investor letter and mentioned General Motors Company (NYSE:GM). Here is what the fund said:
General Motors (NYSE:GM) was a detractor during the quarter, due to increased macro uncertainty, higher fuel prices, and concerns over rising input costs, which pressured the company in particular and the auto industry as a whole. While we are closely monitoring the potential impact of these dynamics, industry demand remains robust, driven by strong consumer balance sheets and pent-up demand after multiple years of constrained production. We also remain confident in GM’s ability to navigate a complex operating environment, which the company has consistently demonstrated over the past few years. Finally, the long-term picture remains bright. We believe GM is significantly undervalued, is well-positioned for the long-term transition to electric vehicles and has numerous needle-moving ancillary business opportunities (most notably Cruise, which is an industry leader in autonomous vehicle technology) that are underappreciated.
5. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 80
QUALCOMM Incorporated (NASDAQ:QCOM) is a global leader in commercializing and developing foundational wireless technologies. The company develops semiconductors, software, and services related to wireless technology. The company’s technology and solutions are used in industries or applications such as automotive and the Internet of Things. The Snapdragon Ride Vision system from QUALCOMM Incorporated (NASDAQ:QCOM) is a new open, modular computer vision and scalable software stack built on a four-nanometer process technology for advanced driver assistance systems and automated driving.
On November 03, 2022, John Vinh, an analyst at KeyBanc, reduced his price target on QUALCOMM Incorporated (NASDAQ:QCOM) to $150 while keeping an Overweight rating. The analyst stated that although the company posted good results for Q4, the forward guidance for Q1 is weak and may cause a downside in the stock price.
In its Q4 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and QUALCOMM Incorporated (NASDAQ:QCOM) was one of them. Here is what the fund said:
Market strength continued in the fourth quarter, with only the communication services sector down in the Russell 1000 Value Index. Portfolio returns benefited from the strong performance of semiconductor maker QUALCOMM Incorporated (NASDAQ:QCOM), which has executed exceptionally well in pursuing the transition to 5G, growing both content and share due to its leadership position in cellular technology. The chipmaker recently outlined a number of peripheral growth opportunities outside of mobile markets, including automotive (where it hopes to leverage its strong presence in the automotive infotainment space into advanced driver assistance systems), Internet of Things (including opportunities in the PC market, VR/AR market, and factory automation) and radio frequency (where mmWave adoption globally, including China, would drive substantial upside).
4. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 88
Headquartered in Texas, Tesla, Inc. (NASDAQ:TSLA) is an American global automotive and clean energy corporation. Tesla, Inc. (NASDAQ:TSLA) creates, develops, manufactures, sells, and leases high-performance all-electric vehicles, as well as energy-generating and storage systems.
Tesla, Inc. (NASDAQ:TSLA) recently reported Q3 2022 results, reporting a topline of $21.45 billion, missing the market estimate by $428.2 million. The company’s Normalized EPS of $1.05 beat the market consensus by $0.05.
Alger Capital made the following comment about Tesla, Inc. (NASDAQ:TSLA) in its Q3 2022 investor letter:
Tesla, Inc. (NASDAQ:TSLA) is an electric vehicle manufacturer with a significant technological lead in its large and rapidly growing addressable market. Shares outperformed during the quarter despite covid 19 shutdowns at the company’s shanghai production plant early in the period. During this quarter, the company also ramped up production at its newer Germany and Texas plants. While investors were aware of these challenging variables, the company’s quarterly results exceeded expectations thanks to lower-than-expected operating expenses. Investors are aware that ramping up electric vehicle production is challenging and recognize it’s difficult to estimate production rates.
3. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 89
NVIDIA Corporation (NASDAQ:NVDA) is a software and fabless corporation that develops graphic processing units, application programming interfaces for data science and high-performance computing, and system-on-a-chip units for the automotive and mobile computing markets. NVIDIA Corporation (NASDAQ:NVDA)’s drive automotive solutions are a collection of hardware and software components for autonomous car designers and manufacturers.
On November 17, 2022, Rajvindra Gill, an analyst at Needham, increased his price target on NVIDIA Corporation (NASDAQ:NVDA) to $200 while keeping a Buy rating on the stock. The company reported strong Q3 results despite slowing data center sales in China, which reflects the strong execution of the management, noted the analyst in a research note.
2. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 140
Apple Inc. (NASDAQ:AAPL) is a multinational technology company that designs, manufactures, and distributes smartphones, personal computers, tablets, wearables, accessories, and related services. Titan is the electric automobile project currently being researched and developed by Apple Inc. (NASDAQ:AAPL). The company is developing self-driving hardware, software, and services as a prospective product.
On November 08, 2022, David Vogt, an analyst at UBS, reduced his price target on Apple Inc. (NASDAQ:AAPL) to $180 while keeping a Buy rating on the stock. The analyst stated that the production delays due to lockdowns in China, causing wait times to increase in the majority of markets.
Here is what Wedgewood Partners specifically said about Apple Inc. (NASDAQ:AAPL) in its Q3 2022 investor letter:
Apple Inc. (NASDAQ:AAPL) grew revenues +5% (foreign exchange adjusted and excluding Russia) driven by record iPhone revenues that were up about +3% on an exceptional year ago comparison of +50%. Apple’s installed base is over 1.8 billion devices which helps drive a software and services business that has generated almost $80 billion of revenue over the past 4 quarters. As we have highlighted in the past, Apple’s relentless focus on the development and integration between hardware (especially ICs) as well as software, continues to add significant value for customers of its products and services. We expect this favorable competitive dynamic to continue for the foreseeable future.
1. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 196
Alphabet Inc. (NASDAQ:GOOGL) is an American multinational technology firm. It operates in three segments: Google Services, Google Cloud, and Other Bets. Waymo LLC, a subsidiary of Alphabet Inc., is a California-based autonomous driving technology business. Its Waymo Driver technology powers both Waymo One, an autonomous ride-hailing service, and Waymo Via, a trucking and local delivery service. Waymo LLC also creates driving technologies for other vehicles, including delivery vans and Class 8 tractor-trailers used in logistics.
On November 23, 2022, Andrew Boone, an analyst at JMP Securities, reduced his price target on Alphabet Inc. (NASDAQ:GOOGL) to $132 while keeping an Outperform rating on the shares. In a research note, the analyst highlighted the worsening macro indicators, including reducing corporate spending and currency fluctuations.
Here is what Mayar Capital has to say about Alphabet Inc. (NASDAQ:GOOG) in its Q3 2022 investor letter:
In early January this year – which admittedly feels like eons ago – US President Joe Biden was pushing Americans to take up the government’s offer of free COVID tests to help tackle the surging omicron variant. How did Biden respond when citizens asked about the availability of these tests?
“Google it!”
This advice, undoubtedly well-meant, was roundly scoffed at by the press, however. It seemed too obvious to be very helpful.
Anyway, the anecdote serves to introduce you to one of our largest holdings, Alphabet; the parent company of Google. Note that first, Alphabet’s original and core product – its search engine – has entered our common vocabulary as a verb. ‘Googling’ something has the same meaning as ‘researching’ or ‘finding an answer to’ something. Second, the reason Biden’s advice was met with such opprobrium was because Googling something has become almost second nature to us now.
These two observations reveal a lot about Google’s strength in the search engine market, in which it has a share of over 90 percent. Because internet search is almost the prototypical network, Google has benefitted from – and we think is also protected by – the huge competitive advantage its scale brings – both to those asking the questions and those providing the answers. The Google search platform becomes increasingly useful to anyone seeking information as a greater volume of stuff becomes available. This starts a virtuous cycle that results in a colossal market share for Google itself. In the language of business strategists, Google benefits from vast network effects.
Because Google’s search results are viewed by billions of eyeballs every day, its search page ‘real estate’ is understandably very valuable to those with goods and services to sell. Advertising revenues from this ‘real estate’ as well as that from its other properties such as Mail, Maps, and so on, totaled almost USD 150b in 2021; amounting to almost 58% of the company’s revenues. Ad sales on YouTube, also owned by Alphabet, brought in another USD 28b. With the secular shift of the advertising spend to digital channels – over which Alphabet has a tight grip – we estimate the company has a share of around 40% of the digital advertising market and is probably the most valuable advertising property in the world… (Click here to see the full text)
You can also take a look at 20 Most Profitable Franchises To Own and 15 Most Valuable Canadian Companies.
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Disclosure: None. 15 Best Self Driving Car Stocks To Buy Now is originally published on Insider Monkey.
