The 4 Best Stocks to Invest in Autonomous Driving
How long will it take? It depends on who you ask.Hopeful Silicon Valley engineers think we'll see them on the road within five years. More conservative auto industry executives peg their debut around 2030. Wall Street analysts are somewhere in the middle.
Still, there's one thing almost everyone agrees on: The era of the autonomous car is rapidly approaching. The benefits to society could be immense: fewer accidents and parking garages, more productive commutes, and less traffic congestion.
For investors, the upside could be equally as impressive. Although the industry remains in its early days, several companies are poised to take advantage of the shift. Below are four stocks that offer exposure to the coming autonomous car revolution.
A moon shot
Google's CEO Larry Page believes in taking moon shots: radical, high-tech bets with the potential to revolutionize an industry. Google X, the search giant's research lab, has been working on an autonomous car since 2010. Last year, the company unveiled its prototype -- a car without a steering wheel or pedals.
The opportunity for Google's technology is almost unknowable -- it hasn't even unveiled a concrete business model. Google has ruled out manufacturing, stating that it wants to seek partnerships with existing automotive companies, but what form those partnerships will ultimately take -- a licensing agreement? -- remains up in the air. For the time being, Google is still very much an advertising giant reliant on its search engine, but the company could look quite different years from now.
Forget tablets -- it's all about the automobileLike Google, chipmaker NVIDIA is currently wed to an entirely different business model and market. Its graphics processors are primarily sold to PC gamers and professionals, and they compose the overwhelming majority of its revenue.
But NVIDIA's system-on-a-chip platform, Tegra, might overshadow its graphics cards at some distant future date. NVIDIA hasn't had much success in getting smartphone or tablet manufacturers to use Tegra, but the processing power it offers has attracted the interest of automotive manufacturers pursuing autonomous vehicles.Earlier this year, at the Consumer Electronics Show, German auto giant Audi announced that it would use Nvidia's latest chip, the Tegra X1, in the development of its future autonomous cars.
Regardless of the manufacturer, autonomous cars are going to require powerful processors to make the complex calculations necessary to operate. NVIDIA could be the company to provide those processors.
An after-market solutionDelphi is one of the largest automotive suppliers in the world. Its business centers primarily on supplying electronics to automobile manufacturers, and in the future, that could include technology for autonomous vehicles.
Delphi has been retrofitting existing cars with a variety of electronics that allow for autonomous capabilities. Earlier this month, it announced that one of its cars had completed a coast-to-coast drive (San Francisco to New York) almost entirely by itself.Delphi's established relationships could give it an advantage, allowing it to supply existing automakers with the technology they need to make their vehicles capable of autonomous driving.
The eyes of the vehicleIn contrast to Delphi, Mobileye is far less established. Its history as a publicly traded company is rather short, and it isn't profitable, but it may offer more upside.
Mobileye's business centers on the creation of software for automotive monocular cameras -- cameras mounted on a vehicle that allow it to see its surroundings. Its technology allows for semi-autonomous functions, such as lane assist or automatic braking, and with future development, it could underpin more advanced aspects of a fully autonomous vehicle.
Mobileye is the most speculative stock on this list, and its technology could be disrupted (for its autonomous car, Google is banking on LIDAR, for example) but Mobileye gives investors the opportunity to purchase a piece of a company that is much more focused on autonomous driving than Google, Nvidia, or Delphi.
The article The 4 Best Stocks to Invest in Autonomous Driving originally appeared on Fool.com.
Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Google (A shares), Google (C shares), and Nvidia. The Motley Fool owns shares of Google (A shares), Google (C shares), and Mobileye. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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