In this article, we will discuss the 11 best autonomous vehicle stocks to invest In.
An autonomous vehicle is one that can drive itself without any human intervention and perform any necessary task through its ability to sense its surroundings. The six levels of automation start from level 0, where a car is entirely dependent on a human driver, up to level 5, where a car does not need human assistance. A car with level 5 automation would be not only able to communicate with other cars but also with traffic lights, signage, and even the roads, to ensure a better and more safe driving experience.
The growth of the autonomous vehicle industry is driven by a secular trend toward sustainability and safety. Every year, almost 1 million deaths are recorded due to road tragedies, and about 90% of them are caused by human error. Autonomous vehicles, due to their non-dependency on human assistance, can diminish these issues significantly and reduce accidents due to human error. Moreover, autonomous vehicles can reduce carbon emissions by reducing the time wasted in commuting by 90% and increasing car utilization.
Even though 40% of car customers worldwide would be willing to drive fully autonomous cars, there are still some concerns that need to be addressed. Crashes caused by the hacking and hijacking of autonomous vehicles and the leakage of private data being collected by these cars are some of the issues people have raised regarding autonomous cars. Aside from this, the necessary technology for an autonomous vehicle to work completely is still in development, including the availability of reliable and consistent 5G technology.
However, given the amount of resources being put into the sector, we can expect the technical issues to be resolved soon in the future. According to Statista, the value of the global autonomous vehicle market in 2021 stood at $27 billion and is expected to grow to $62 billion by 2026. According to Globenewswire, the industry is expected to grow to $125.67 billion by 2030 at a CAGR of 22.3%. Many big names in the technology and automobile industry are engaged in developing semi-autonomous and fully autonomous vehicles, with prototypes being tested in their R&D centers. Almost 73% of all cars in the United Kingdom are expected to have some level of autonomy by 2025 before fully autonomous cars enter the market.
Some of the leading names operating in the autonomous vehicle industry include QUALCOMM Incorporated (NASDAQ:QCOM), NVIDIA Corporation (NASDAQ:NVDA), and Tesla, Inc. (NASDAQ:TSLA).
Our Methodology
To come up with a list of the 11 best autonomous vehicle stocks to invest in, we have picked some of the leading companies operating in the autonomous vehicle industry and have ranked their stocks in order of hedge fund holding using Insider Monkey’s proprietary hedge fund holdings database, tracking more than 900 hedge funds. Hedge fund sentiment provides insight to an average investor about the potential return prospects of a company.
11 Best Autonomous Vehicle Stocks To Invest In
11. ON Semiconductor Corporation (NASDAQ:ON)
Number of Hedge Fund Holders: 45
ON Semiconductor Corporation (NASDAQ:ON) is a company based in the United States that delivers intelligent sensing and power solutions. Intelligent power technologies from the company enable the electrification of the automotive industry, enabling lighter and longer-range electric vehicles, empowering efficient fast-charging systems, and propelling sustainable energy for the most efficient solar strings, industrial power, and storage systems. Moreover, ON Semiconductor Corporation (NASDAQ:ON) develops sensors for autonomous vehicles such as LiDAR, radar, and cameras.
On November 1, 2022, Joseph Moore, an analyst at Morgan Stanley, increased his price target on ON Semiconductor Corporation (NASDAQ:ON) to $70.40 while keeping an Equal Weight rating on stocks. Despite some margin pressure, the analyst believes that the company is well-prepared for the challenging times ahead.
As per Insider Monkey’s database, 45 hedge funds owned stakes in ON Semiconductor Corporation (NASDAQ:ON) at the end of the September quarter. Whale Rock Capital Management was the most bullish fund on the company’s stock at the end of Q3 2022.
In addition to ON Semiconductor Corporation (NASDAQ:ON), NVIDIA Corporation (NASDAQ:NVDA), Apple Inc. (NASDAQ:AAPL) and Alphabet Inc. (NASDAQ:GOOGL) are included in our list of 11 best autonomous vehicle stocks to invest in.
10. 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 specialized specialty chemicals. The Lithium division of the company develops lithium-based solutions for various sectors, including the autonomous car industry. Lithium batteries are widely used in electric vehicles.
On November 8, 2022, Arun Viswanathan, an analyst at RBC Capital, increased his price target on Albemarle Corporation (NYSE:ALB) to $380 while keeping an Outperform rating on the stock. Although the analyst is bullish on Albemarle Corporation (NYSE:ALB) due to the tight lithium supply-demand market, he remains wary of the possibility of significant price swings in the lithium spot market.
49 hedge funds are currently bullish on Albemarle Corporation (NYSE:ALB) as per Insider Monkey’s database. Millennium Management had the leading stake in the company at the end of Q3 2022.
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.
9. NXP Semiconductors N.V. (NASDAQ:NXPI)
Number of Hedge Fund Holders: 52
NXP Semiconductors N.V. (NASDAQ:NXPI) is a Dutch multinational semiconductor company. The company’s products include cryptography security, high-speed interface, radio frequency, power management, digital signal processing, and embedded system design. The company’s product solutions are utilized in various end-market applications, including automotive, internet of things, and communications infrastructure. The company’s advanced driver assistance systems include radar, lidar, vision sensing, and a V2X system.
On November 2, 2022, Ross Seymore, an analyst at Deutsche Bank, reduced his price target on NXP Semiconductors N.V. (NASDAQ:NXPI) to $170 while keeping a Buy rating on the stock. According to the analyst, the company reported an impressive earnings beat in Q3 2022; however, the fourth quarter guide seems light. The analyst believes that the management is being careful in its approach to declining demand in consumer-exposed segments.
According to Insider Monkey’s database, 52 hedge funds held stakes in NXP Semiconductors N.V. (NASDAQ:NXPI) at the end of the third quarter ending September 2022. Citadel Investment Group remained the leading stakeholder in the company at the end of Q3 2022.
8. Honeywell International Inc. (NASDAQ:HON)
Number of Hedge Fund Holders: 53
Honeywell International Inc. (NASDAQ: HON) is a global technology and manufacturing firm that provides aerospace and automotive products and services. Its business segments include aerospace, home & building technologies, safety & productivity solutions, and performance materials & technologies. VSI Labs uses inertial measurement units from Honeywell International Inc. (NASDAQ:HON) to develop vehicle systems that help autonomous vehicles in positioning.
On December 9, 2022, Kaplowitz Read, an analyst at Citi, increased his price target on Honeywell International Inc. (NASDAQ:HON) to $248 from $213 while keeping a Buy rating on the stock. According to the analyst, improvement in the supply chain and price vs. cost trends remain in favor of improving profitability.
As per Insider Monkey’s database, 53 hedge funds remained bullish on Honeywell International Inc. (NASDAQ:HON) at the end of Q3 2022. Diamond Hill Capital came out to be the biggest holder of the company’s shares at the end of the quarter.
Here is what ClearBridge Investments has to say about Honeywell International Inc. (NASDAQ:HON) in its Q1 2021 investor letter:
The portfolio’s quality bias and valuation discipline have generated compelling returns over time with typically strong relative results in more challenging environments as it did through the first three quarters of 2020. However, that same quality bias tends to create a more challenging relative performance environment for the Strategy during periods of sharp economic acceleration, which tend to benefit stocks that are more commodity linked or of lower quality. This has been the case during the vaccine- and stimulus-driven rally experienced late last year and during the most recent quarter. Sectors that lagged in the quarter included industrials, Honeywell also lagged in the quarter after previously generating strong returns over extended periods.
7. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 69
Intel Corporation (NASDAQ:INTC) is a global corporation that develops, manufactures, and distributes computer hardware and software worldwide. Intel Corporation (NASDAQ:INTC) is a majority shareholder of Mobileye Global Inc. (NASDAQ:MBLY), which is a leading provider of self-driving technologies and driver assistance systems. Mobileye’s product portfolio comprises computation platforms, computer vision, machine learning-based sensing, mapping and localization, driving policy, and active sensors needed for assisted and autonomous driving.
On October 31, 2022, Christopher Danely, an analyst at Citi, reduced his price target on Intel Corporation (NASDAQ:INTC) to $27. The analyst believes that INTC reported mixed results for Q3 2022 but also unveiled a cost-cutting plan which should help the company.
At the end of Q3 2022, 69 hedge funds in Insider Monkey’s database were bullish on Intel Corporation (NASDAQ:INTC) at the end of the quarter. Two Sigma Advisors remained the leading stakeholder of the company at the end of Q3 2022.
Baron Funds mentioned the company in its Q2 2022 investor letter and stated that:
Then, there is the case of Intel Corporation (NASDAQ:INTC). A blue-chip tech champion with a market capitalization of over $500 billion in early 2000, the stock was trading at a P/E multiple of 42. It was a fast-growing company whose stock price and multiple declined more or less in line with its peers. However, unlike Google, Intel’s net income has grown from $7.3 billion in 1999 to $19.9 billion in 2021, a compounded annual growth rate of just 4.7%. Its growth from the dot com era has not proven to be durable, and Intel has yet to trade at the price it attained in 1999.
6. General Motors Company (NYSE:GM)
Number of Hedge Fund Holders: 74
General Motors Company (NYSE:GM) is an American vehicle manufacturer that designs, manufactures, and distributes trucks, crossovers, automobiles, and automobile components, as well as software-enabled services and subscriptions, globally. The company’s cruise segment provides software and hardware autonomous automobile technologies like light detection and ranging sensors. General Motors Company (NYSE:GM) has plans to launch autonomous Robotaxi in the United States.
On October 26, 2022, Ryan Brinkman, an analyst at JPMorgan, increased his price target on General Motors Company (NYSE:GM) to $59 while keeping an Overweight rating on the stock. General Motors Company (NYSE:GM) turned in higher than anticipated EBIT in Q3 and the analyst remains confident in the company’s ability to execute amidst a challenging environment as it has several times in its history.
As per Insider Monkey’s database, 74 hedge funds remained bullish on General Motors Company (NYSE:GM) at the end of the third quarter. Berkshire Hathaway had the biggest stake in the company at the end of the third quarter.
Diamond Hill made the following comment about General Motors Company (NYSE:GM) in its Q3 2022 investor letter:
Most recently, we initiated a position in General Motors Company (NYSE:GM), one of the largest automakers in the United States. Over the past several years, GM has taken steps necessary to focus the company on the most profitable segments and move into position to compete in an electrified and autonomous world. With the recent rise in interest rates there was a meaningful selloff in the auto industry, which presented us with an attractive entry point to a name we know well.
5. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 80
QUALCOMM Incorporated (NASDAQ:QCOM) is a world leader in the commercialization and development of wireless technologies. The company creates semiconductors, software, and wireless technology-related services. The technologies and solutions developed by the company are utilized in industries or applications such as automotive and the internet of things. QUALCOMM Incorporated (NASDAQ:QCOM) Snapdragon Ride Vision System is a new open, modular computer vision and scalable software stack designed for the optimized implementation of surround and front cameras for advanced driver assistance systems and automated driving.
On November 2, 2022, QUALCOMM Incorporated (NASDAQ:QCOM) reported its Q4 2022 result, reporting revenue of $11.39 billion, beating market estimates by $19.96 million. The company’s Normalized EPS stood at $3.13, meeting market expectations.
At the end of Q3 2022, 80 hedge funds in Insider Monkey’s database were long on QUALCOMM Incorporated (NASDAQ:QCOM) at the end of the quarter. Matrix Capital Management remained the leading stakeholder of the company at the end of Q3 2022.
4. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 88
Tesla, Inc. (NASDAQ:TSLA) is an American automobile company headquartered in Austin, Texas. Tesla, Inc. (NASDAQ:TSLA) designs, develops, produces, and sells high-performance electric vehicles, energy-producing and storage systems, and provides services tied to its sustainable energy products. Tesla Autopilot is a set of advanced driver-assist systems with features such as lane centering, automated lane changes, traffic-aware cruise control, self-parking, and the ability to call the car from a garage or parking place.
On December 20, 2022, Vijay Rakesh, an analyst at Mizuho, reduced his price target on Tesla, Inc. (NASDAQ:TSLA) to $285 while keeping a Buy rating on the stock. According to the analyst, the electric vehicle market will continue to grow, although high prices and a challenging environment can become a hurdle.
As per Insider Monkey’s database, 88 hedge funds owned stakes in Tesla, Inc. (NASDAQ:TSLA) at the end of the third quarter. ARK Investment Management remained the leading stakeholder of the company at the end of Q3 2022.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Tesla, Inc. (NASDAQ:TSLA) was one of them. Here is what the fund said:
In 2014, before we began to invest in Tesla (NASDAQ:TSLA), I called Roger to ask whether he thought Elon Musk’s electric car business would succeed. I did not believe that Roger, an owner of dealerships that sell cars powered by internal combustion engines (ICE) would likely have a favorable opinion of Tesla’s prospects. That was principally for two reasons:
First, automobile manufacturing and distribution is unusually complicated, capital intensive, and highly regulated, which makes profitability problematic; second, cars with ICE motors require extensive annual maintenance, and dealer services revenues, not profits from automobile sales, are the most important contributor to profits of perpetual licensed ICE car dealerships.
Penske Automotive Group is principally an ICE car dealer. Since electric cars are powered by batteries and need little service, franchised dealerships are incented to sell ICE, not EV automobiles. Further, Roger had been a long-term director of General Motors. General Motors’ ICE automobile business would be disrupted if Tesla were successful. (click here to read more…)
3. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 89
NVIDIA Corporation (NASDAQ:NVDA) is a software and fabless company that creates 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 sectors. Nvidia Drive automotive solutions are a collection of hardware and software components for autonomous car designers and manufacturers. In September 2022, NVIDIA Corporation (NASDAQ:NVDA) launched DRIVE Thor, a next-generation centralized computer for safe and secure autonomous automobiles.
On December 19, 2022, Rajvindra Gill, an analyst at Needham, increased his price target on NVIDIA Corporation (NASDAQ:NVDA) to $230 while keeping a Buy rating on the stock. The analyst believes NVIDIA Corporation (NASDAQ:NVDA)’s customers are upgrading to the most recent H100 architecture even though he anticipates turbulence in the entire data center industry in 2023.
According to Insider Monkey’s database, 89 hedge funds held shares of the company at the end of the third quarter of 2022. Fisher Asset Management was the most bullish fund on the company’s stock at the end of Q3 2022.
Here is what ClearBridge Investments had to say about NVIDIA Corporation (NASDAQ:NVDA) in its third-quarter 2022 investor letter:
Likewise, graphics chip maker NVIDIA Corporation (NASDAQ:NVDA) (-19.9%) has struggled through the post-COVID-19 recovery but maintains dominant positions in key secular growth markets of AI and gaming. The company has significantly underperformed the index and semiconductor peers recently due to a gaming inventory correction, a decline in aggregate cryptocurrency demand and reduction in crypto mining intensity as well as concerns around the sustainability of data center sales.
We tactically trimmed our position early in 2022 due to concerns around these cycle dynamics but remain confident in the company’s long-term prospects.
2. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 140
Apple Inc. (NASDAQ:AAPL) is a global technology company that creates, manufactures, and sells smartphones, personal computers, tablets, wearable devices, accessories, and associated services. Apple Inc. (NASDAQ:AAPL)’s Project Titan is focused on building fully autonomous vehicles.
On December 12, 2022, Martin Yang, an analyst at Oppenheimer, reduced his price target on Apple Inc. (NASDAQ:AAPL) to $170 while keeping an Outperform rating on the stock. The reduced outlook is due to the loss of iPhone demand in the second quarter of 2023 due to supply chain problems. However, the analyst believes that China’s zero-COVID policy will help accelerate iPhone capacity recovery in Zhengzhou.
As per Insider Monkey’s proprietary database, 140 hedge funds were bullish on Apple Inc. (NASDAQ:AAPL), as of the end of the third quarter. Berkshire Hathaway was the biggest stakeholder in the company’s stock at the end of Q3 2022.
1. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 196
Alphabet Inc. (NASDAQ:GOOGL) is a multinational technology company based in the United States. It is divided into three business units: Google Services, Google Cloud, and Other Bets. Waymo LLC is a California-based autonomous driving technology company that is owned by Alphabet Inc. (NASDAQ:GOOGL).
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 stock. The analyst is expecting a recovery of digital advertising by the third quarter of next year.
196 hedge funds were long on the company’s stock at the end of the third quarter, according to Insider Monkey’s database. TCI Fund Management had the biggest long position in the company at the end of Q3 2022.
You can also take a look at 11 Best Medical Technology Stocks To Buy and 15 Best Affordable Stocks To Buy Now.
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Disclosure: None. 11 Best Autonomous Vehicle Stocks To Invest In is originally published on Insider Monkey.
