In this article, we discuss the 12 best autonomous trucking and vehicle stocks to buy now. If you want to skip the detailed analysis of the autonomous vehicle industry, you can go directly to the 5 Best Autonomous Trucking and Vehicle Stocks To Buy Now.
According to Allied Market Research, the size of the autonomous vehicle industry is set to expand at a compound annual growth rate (CAGR) of over 40% between 2021 and 2030. At the end of 2020, the size of the autonomous vehicle and trucking industry was valued at $76.13 billion. It is anticipated to reach $2.16 trillion by the end of this decade. The global autonomous vehicle market can be broken down into six sub-categories, namely application, automation, component, propulsion type, region, and vehicle type. According to a report released by leading management consulting firm McKinsey in January 2023, autonomous driving has the potential to contribute $300 billion to $400 billion to the top line of companies involved in this industry by 2035. Within this estimate, around $170 billion to $230 billion is expected to be contributed by Level 4 automation, which refers to a high level of automation where the vehicle can drive itself under certain conditions, but a human driver must be able to take over when the system requests. The driver does not need to constantly monitor the driving environment. The analysts at McKinsey believe that the hardware and software cost of Level 3 and Level 4 automation could be as high as $5,000 per vehicle. McKinsey anticipates that 12% of new passenger cars sold by 2030 will have at least Level 3 autonomous driving capabilities. Meanwhile, the adoption of advanced autonomous driving technologies is expected to reduce the number of accidents by 15% in Europe by 2030.
Transforming the Trucking Industry with Autonomous Technology
Investing in the best autonomous driving stocks requires a long-term view. Numerous self-driving car companies such as Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOGL), and NVIDIA Corporation (NASDAQ:NVDA) have introduced autonomous vehicles across various cities in the US and across the world. Investors who opt for an early buy-in into this theme could see a significant upside down the line. The introduction of autonomous technology into the trucking industry holds significant importance due to its critical role in various industries’ supply chains. It’s worth noting that trucks are involved in over 500,000 accidents annually, equivalent to 9.5% of total accidents in the US. Truck drivers have a 10 times higher probability of death on the job as compared to an average American. According to the CEO of Pittsburgh, Pennsylvania-based autonomous technology provider Aurora Innovation, Inc. (NASDAQ:AUR), Chris Urmson, 29 of the 30 incidents that took place between Dallas and Houston could have been avoided if Aurora Driver had operated the truck instead of a human. This reflects the high level of safety guaranteed by autonomous driving technologies. The company is working on introducing completely autonomous driving trucks without the presence of a human by the end of 2024. This could play a pivotal role in overcoming the shortage of long-haul truck drivers in the US, which currently stands at 80,000 and is anticipated to double by 2030. Aurora Innovation, Inc. (NASDAQ:AUR) is considered among the best under-the-radar autonomous vehicle stocks. You can also check out the 10 Best EV, Battery and Autonomous Driving ETFs here.
Regulatory Developments in Autonomous Driving
The autonomous driving industry received a win when the Governor of California, Gavin Newsom, vetoed the bill that would have required a human to be present at all times when an autonomous truck was on the road in the Golden State. Experts believe that the Silicon Valley state already has the toughest regulations for autonomous vehicles in the US. The state has only allowed light-duty trucks on its public roads, and companies must undergo numerous tests before deploying any new automobile-related technology on the roads. Meanwhile, China is also amongst the countries at the forefront of promoting autonomous driving technology. In Beijing, the world’s first fully connected cloud-controlled autonomous driving demonstration zone has been established. Baidu, Inc. (NASDAQ:BIDU) is a leading name in the autonomous driving industry in China through its Apollo Go division. During the first quarter of 2023, approximately 42% of new passenger vehicles sold in China were equipped with varying levels of autonomous driving assistance features. China boasts a vast network of over 20,000 kilometers (km) of roads available for autonomous vehicle testing. With this context in mind, let’s take a look at our autonomous driving companies’ rankings.
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Our Methodology
We have shortlisted the 12 best autonomous driving stocks to buy using Insider Monkey’s database of 910 elite hedge funds. Each of the companies listed below provides exposure to either one or multiple sub-categories of the autonomous trucking and vehicle industry. We have ranked the best autonomous driving stocks in ascending order of the number of hedge funds holding a stake in them as of Q2 2023.
Best Autonomous Trucking and Vehicle Stocks To Buy Now
12. Baidu, Inc. (NASDAQ:BIDU)
Number of Hedge Fund Holders: 36
Value of Hedge Fund Holdings: $1,759,298,500
Market Capitalization: $46.62 billion
Baidu, Inc. (NASDAQ:BIDU) is a Beijing, China-based artificial intelligence (AI) and internet company. Baidu, Inc. (NASDAQ:BIDU) has taken a major initiative to advance autonomous vehicles through its Apollo program. The company has been testing autonomous vehicles on public roads in China since 2018 using its Apollo open self-driving platform. Its test fleet has logged over 60 million kilometers of autonomous driving. Baidu, Inc. (NASDAQ:BIDU) recently expanded its fleet of driverless taxis in Wuhan to 300.
Here’s what Ariel Investments said about Baidu, Inc. (NASDAQ:BIDU) in its Q2 2023 investor letter:
“By comparison, after a strong run last quarter, China’s internet search and online community leader, Baidu, Inc. (NASDAQ:BIDU) declined alongside a correction in Chinese stocks attributed to weak gross domestic product. We believe this price action runs counter to the company’s solid business fundamentals. Baidu delivered a top- and bottom-line earnings beat in the period, driven by a recovery in ad and cloud revenues. The company continues to invest heavily in Artificial Intelligence (AI) and is launching a generative AI, Ernie Bot, aimed at rivaling Open AI’s ChatGPT. While monetization of the new technology is largely dependent on regulatory review, we think Baidu should continue to experience margin improvement with the ongoing implementation of efficiency and profitability initiatives. While some investors remain on the sidelines due to uncertainty surrounding China’s economic growth, government regulations, and the political rhetoric towards Taiwan, we remain enthusiastic about Baidu’s longer-term opportunity for revenue growth and margin expansion across internet search, cloud, autonomous driving, artificial intelligence and online video.”
11. Lyft, Inc. (NASDAQ:LYFT)
Number of Hedge Fund Holders: 38
Value of Hedge Fund Holdings: $404,462,190
Market Capitalization: $3.84 billion
Lyft, Inc. (NASDAQ:LYFT) is a San Francisco, California-based ride-hailing service provider and a competitor of Uber Technologies, Inc. (NYSE:UBER) in the North American region. The company claims to have provided 100,000 rides in autonomous vehicles. Lyft, Inc. (NASDAQ:LYFT) is developing self-driving car technology through its Level 5 division. Level 5 aims to build ridesharing vehicles that can operate safely without human drivers. The company is at the eleventh position on our list of the best autonomous driving stocks to buy now.
ClearBridge Investments shared its stance on Lyft, Inc. (NASDAQ:LYFT) in its Q2 2023 investor letter. Here’s what the firm said:
“The sale of rideshare provider Lyft, Inc. (NASDAQ:LYFT), similar to our moves in communication services, prunes a smaller position to consolidate the portfolio in our highest conviction ideas. We initially purchased Lyft in May 2021 when rideshare volumes were still depressed due to COVID-19. While Lyft was a clear #2 behind Uber in domestic rideshare, we believed it was a cleaner way to play the U.S. recovery due to the focused nature of its business. However, poor execution and the uneven nature of the U.S. recovery, with West Coast markets where Lyft has historically had greater exposure lagging due to a lack of return to office work, further weakened its market position. In March, Lyft announced co-founder Logan Green would step down as CEO with David Risher, a former Amazon executive, taking his place. While Risher has laid out ambitions to drive Lyft’s market share higher, we believe doing so will require more than a few quarters fix. Furthermore, while the company has looked for areas to right size their cost base, we see necessary investments in price, service levels and product differentiation to drive this turnaround further pushing out the path to improved profitability.”
10. Ford Motor Company (NYSE:F)
Number of Hedge Fund Holders: 40
Value of Hedge Fund Holdings: $895,505,810
Market Capitalization: $49.75 billion
Ford Motor Company (NYSE:F) has established a dedicated subsidiary known as Latitude AI solely focused on the development of autonomous driving technology. The Dearborn, Michigan-based automaker intends to bring together experts in the field of machine learning, operations, sensors, software, and systems engineering together for the advancement of autonomous driving technology. Ford Motor Company (NYSE:F) has recorded over 50 million miles of hands-free driving through its Active Driving Assistance System, Ford BlueCruise.
9. Aptiv PLC (NYSE:APTV)
Number of Hedge Fund Holders: 40
Value of Hedge Fund Holdings: $1,823,077,500
Market Capitalization: $27.69 billion
Aptiv PLC (NYSE:APTV) is a Troy, Michigan-based automotive technology company focused on advanced safety, connectivity, and self-driving solutions for major automakers. The company has the distinction of rolling out autonomous ride-hailing services on a commercial level in the city of Las Vegas. As of 2023, Aptiv PLC (NYSE:APTV) has provided over 100,000 self-driving rides to the general public and claims it has received 100% ratings from 98% of the customers.
Here’s what Artisan Partners said about one of the best autonomous driving stocks in its Q2 2023 investor letter:
“Along with Catalent, we ended our investment campaigns in Aptiv PLC (NYSE:APTV) and Nasdaq during the quarter. Aptiv is a leading provider of safety, infotainment and electronic control components to the automotive market. Our view was that the company was well-positioned to benefit from several strong secular industry trends—the shift from internal combustion engines to electric vehicles, autonomous driving and increased computing intensity in vehicles. Over our holding period, a volatile macro environment (pandemic, supply chain shortages) steadily weighed on the profit cycle despite the company’s strong new business announcements. Furthermore, we believe the company may be increasingly disadvantaged as leading auto manufacturers work around tier-one suppliers (such as Aptiv) to maximize profits and speed to market. While the profit cycle may ultimately take hold, we concluded that several of our semiconductor holdings (ON Semiconductor, Lattice Semiconductor and Monolithic Power Systems) offer stronger leverage to these important new auto trends and decided to exit the position.”
8. General Motors Company (NYSE:GM)
Number of Hedge Fund Holders: 72
Value of Hedge Fund Holdings: $2,513,405,900
Market Capitalization: $44.82 billion
General Motors Company (NYSE:GM) is betting heavily on autonomous vehicles as it anticipates generating annual revenue of $50 billion through its Cruise autonomous vehicle division by 2030. To achieve this goal, General Motors Company (NYSE:GM) has expanded the presence of Cruise to cities in Arizona and Texas. Of the 910 hedge funds in Insider Monkey’s database at the end of Q2 2023, 72 funds reported owning a stake in General Motors Company (NYSE:GM).
7. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 73
Value of Hedge Fund Holdings: $2,303,052,600
Market Capitalization: $120.17 billion
QUALCOMM Incorporated (NASDAQ:QCOM) is a San Diego, California-based chipmaker that is targeting the autonomous vehicle industry through the Snapdragon Ride platform. The platform integrates multiple critical components for self-driving, including cameras, radars, LIDAR processing, CUDA cores for neural network AI, functional safety capabilities, and autonomous driving software. QUALCOMM Incorporated (NASDAQ:QCOM) claims that Snapdragon Ride delivers over 700 trillion operations per second to run deep learning-based perception and planning algorithms for autonomous vehicles. QUALCOMM Incorporated (NASDAQ:QCOM) has secured the seventh position on our list of the best autonomous driving stocks to buy now.
6. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 79
Value of Hedge Fund Holdings: $6,517,644,300
Market Capitalization: $777.25 billion
Tesla, Inc. (NASDAQ:TSLA) gains exposure to the autonomous driving industry through its Full Self Driving (FSD) software. The software can be either purchased for a lump-sum payment of $12,000 or a monthly payment of $199. FSD is Tesla’s advanced driver assistance system that uses onboard cameras, sensors, and neural net processing power to enable autonomous driving features in Tesla, Inc. (NASDAQ:TSLA) vehicles. The platform’s capabilities include auto lane changing, automated parking, stopping at traffic lights and stop signs, and highway autopilot features.
Here’s what Baron Funds said about Tesla, Inc. (NASDAQ:TSLA) in its Q2 2023 investor letter:
Many factors contributed to the strong performance of our largest Disruptive Growth position, Tesla, Inc. (NASDAQ:TSLA), in the period. Investors’ concerns regarding Tesla in 2022 continue to dissipate, and the company’s business has continued to grow materially, although at below peak margins. Tesla’s deliveries in China are recovering. The company’s newest factory in Texas has ramped production and should contribute to improved domestic sales and margins. U.S. government policies have lowered the cost to own Tesla vehicles, while also reducing the company’s battery production expenses.
We continue to believe that Tesla is only scratching the surface of its potential. We regard announced partnerships between Tesla and its competitors in the quarter as important. In early June, Tesla agreed to provide Ford Motors access to Tesla’s electric vehicle (EV) charging technology and network. Other traditional and pure EV manufacturers, including General Motors, Rivian, and Volvo, quickly followed suit. We expect additional charging partnerships to ensue. In our view, these relationships validate Tesla’s charging technology and infrastructure as superior to other standards. Consolidation around a single technology should accelerate charging infrastructure deployment, diminish the risk of Tesla’s technology becoming obsolete, and lessen a key concern of hesitant EV purchasers. EV adoption is at a tipping point. And Tesla, with its approximately 60% domestic market share of EVs, should be the most important beneficiary of this shift…” (Click here to read the full text)
In addition to Tesla, Inc. (NASDAQ:TSLA), Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOGL), and NVIDIA Corporation (NASDAQ:NVDA) are also some of the best autonomous driving stocks to buy now.
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Disclosure. None. 12 Best Autonomous Trucking and Vehicle Stocks To Buy Now is originally published on Insider Monkey.