In this article, we will take a look at the 10 best self-driving car stocks to invest in. To skip our detailed analysis of the electric vehicle industry and its growth potential, you can go directly to the 5 Best Self Driving Car Stocks to Invest In.
Only a decade ago, the idea of seeing driverless cars roaming about on the streets would have seemed laughable and increasingly unrealistic, however today, that is not the case. Electric and autonomous vehicles are gradually beginning to take over the global stage, with companies like Tesla, Inc. (NASDAQ: TSLA), Ford Motor Company (NYSE: F), Alphabet Inc. (NASDAQ: GOOG), and General Motors Company (NYSE: GM) being some of the major players in the sector.
In light of the above, the global community has begun to witness rapid changes in the automobile industry as we know it. The first change is a shift from traditional to electric vehicles. Governments in the US are driving ahead this change by banning the sale of gasoline-powered vehicles in the near future. For instance, California banned the sale of gasoline cars after 2035, while President Biden's administration has included $174 billion in their new infrastructure bill to aid the growth of the EV sector.
The second major change as reported by the Wall Street Journal relates to the emergence of vehicles that are not only electric but autonomous as well. Autonomous cars reportedly clocked about 2 million miles in test drives in California last year. Bloomberg has also reported that the market for self-driving vehicles is expected to reach 5.64 million units by 2024, growing at a CAGR of over 21% between 2020 and 2024. Hence, we can reasonably draw the conclusion that electric and autonomous cars are slowly, but surely, taking over the automobile market as demand for the vehicles continues to grow and governments and companies alike take initiative in helping the sector grow to unprecedented heights.
Keeping the above in mind, we have written this article listing the best self-driving car stocks to invest in, in light of the growing popularity of autonomous vehicles within consumer and investor circles alike. The stocks added to our list were selected on the basis of hedge fund popularity, fundamentals, analysts' ratings, and future growth potential based on core business strengths.
Despite the unchallenged and undeniable growth of the autonomous vehicle sector, it is becoming difficult to find the perfect self-driving car stocks to invest in, in the aftermath of the pandemic. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and May 28th, 2021, our monthly newsletter’s stock picks returned 206.8%, vs. 91.0% for the SPY. Our stock picks outperformed the market by more than 115 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017, and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Without further ado, let's look at the 10 best self driving car stocks to invest in.
Number of Hedge Fund Holders: 12
Luminar Technologies, Inc. (NASDAQ: LAZR) is a vehicle sensor and software company. It has two segments: Autonomy Solutions, and Other Component Sales. The company's technology and lidar sensors are used in autonomous vehicles, and it ranks 10th on our list of the best self driving car stocks to invest in.
On June 25th, Baird upgraded Luminar Technologies, Inc. (NASDAQ: LAZR) to Outperform with a $30 price target, after the company's lidar sensors were announced to be standardly used on Volvo's EVs in 2022. The company's CFO also commented that Luminar Technologies, Inc. (NASDAQ: LAZR) would target profitability by 2024, and expects to end 2021 with more than the $485.7 million in liquidity it had in December 2020, and the $610.3 million figure from this March. In the first quarter of 2021, Luminar Technologies, Inc. (NASDAQ: LAZR) had an EPS of -$0.08, missing estimates by -$0.04, while its $5.31 million revenue beat estimates by $0.48 million. The stock has also gained 118.68% in the past year.
By the end of the first quarter of 2021, 12 hedge funds out of the 866 tracked by Insider Monkey held stakes in Luminar Technologies, Inc. (NASDAQ: LAZR) worth roughly $39.2 million. This is compared to 25 hedge fund holders in the previous quarter, with a total stake value of about $160 million. Like Tesla, Inc. (NASDAQ: TSLA), Ford Motor Company (NYSE: F), Alphabet Inc. (NASDAQ: GOOG), and General Motors Company (NYSE: GM), this is a good stock to invest in.
Number of Hedge Fund Holders: 18
Toyota Motor Corporation (NYSE: TM) is a manufacturer of passenger vehicles, minivans, and commercial vehicles and their parts and accessories. The company has a self-driving software by the name of Chauffeur, and it ranks 9th on our list of the best self driving car stocks to invest in.
This April, Toyota Motor Corporation (NYSE: TM) announced its acquisition of Lyft's autonomous vehicle division for $550 million. The company's US sales also grew 46.7% in May to encompass 242,171 units, while its APV sales increased by 196% as well. In early June, Toyota Motor Corporation (NYSE: TM) revealed its electric car model bZ4X in the US while highlighting its own aim to reach carbon neutrality by 2050. Toyota Motor Corporation (NYSE: TM) has offered sales and income guidance for the year, expecting the former to rise 14% to 8.7 million units, and the latter to rise 2.4%.
In the fiscal fourth quarter of 2021, Toyota Motor Corporation (NYSE: TM) had $69.44 billion in revenue, and the company has a gross profit margin of 17.76%. The stock has gained 15.48% in the past 6 months and 15.51% year to date.
By the end of the first quarter of 2021, 18 hedge funds out of the 866 tracked by Insider Monkey held stakes in Toyota Motor Corporation (NYSE: TM) worth roughly $824 million. This is compared to 11 hedge fund holders in the previous quarter, with a total stake value of about $797 million. Like Tesla, Inc. (NASDAQ: TSLA), Ford Motor Company (NYSE: F), Alphabet Inc. (NASDAQ: GOOG), and General Motors Company (NYSE: GM), this is a good stock to invest in.
Number of Hedge Fund Holders: 49
Ford Motor Company (NYSE: F) is an automobile manufacturer selling Ford trucks, cars, sport utility vehicles, EVs, and Lincoln luxury vehicles across the world. The company is planning to launch its autonomous commercial business next year, with the vehicles being based on the Ford Escape Hybrid. It ranks 8th on our list of the best self driving car stocks to invest in.
This July, Ford Motor Company (NYSE: F) reported a 117% rise in its electric vehicle sales in June, while in the previous month, UBS raised its price target on Ford Motor Company (NYSE: F) shares from $13 to $16 as well.
On June 23rd, Ford Motor Company's (NYSE: F) subsidiary Spin launched its electric scooter model, the S-100T. In the first quarter of 2021, Ford Motor Company (NYSE: F) had an EPS of $0.89, beating estimates by $0.68, while its $33.55 billion revenue represented a 7.06% growth year over year and beat estimates by $1.34 billion. The stock has a forward PE ratio of 11.59 and has gained 69.61% in the past 6 months and 75.59% year to date. The company has a gross profit margin of 8.07% as well.
By the end of the first quarter of 2021, 49 hedge funds out of the 866 tracked by Insider Monkey held stakes in Ford Motor Company (NYSE: F) worth roughly $2.19 billion. This is compared to 41 hedge fund holders in the previous quarter, with a total stake value of about $1.65 billion.
Number of Hedge Fund Holders: 50
Aptiv PLC (NYSE: APTV) manufactures and sells vehicle components across the globe, and provides electrical, electronic, and safety technology solutions to the automotive and commercial vehicle markets. The company ranks 7th on our list of the best self driving car stocks to invest in.
This May, Aptiv PLC (NYSE: APTV) was upgraded to Overweight by Morgan Stanley with a $205 price target allotted to the stock. In the first quarter of 2021, Aptiv PLC (NYSE: APTV) had an EPS of $1.06, beating estimates by $0.28, while its revenue of $4.02 billion, an increase of 24.71% year over year, beat estimates by $342.06 million. The company has a gross profit margin of 16.47% and the stock has gained 20.79% in the past 6 months and 19.45% year to date.
By the end of the first quarter of 2021, 50 hedge funds out of the 866 tracked by Insider Monkey held stakes in Aptiv PLC (NYSE: APTV) worth roughly $1.41 billion. This is compared to 44 hedge fund holders in the previous quarter, with a total stake value of about $1.35 billion. Like Tesla, Inc. (NASDAQ: TSLA), Ford Motor Company (NYSE: F), Alphabet Inc. (NASDAQ: GOOG), and General Motors Company (NYSE: GM), this is a good stock to invest in.
Oakmark Funds, an investment management firm, mentioned Aptiv PLC (NYSE: APTV) in their first-quarter 2021 investor letter. Here's what they said:
“Aptiv approached our estimates of intrinsic value and was, therefore, eliminated during the period. The company was longstanding investment of the Fund and produced successful outcomes. We continue to believe that Aptiv is a well-positioned auto supplier that is likely to continue outgrowing light vehicle production for the foreseeable future, but this dynamic is now more fully appreciated by the market.”
Number of Hedge Fund Holders: 62
Tesla, Inc. (NASDAQ: TSLA) is a manufacturer of EVs, energy generation, and storage systems in the US, China, and internationally. The company is expected to have Full Self-Driving Tech with Level 5 autonomy by the end of this year. Tesla, Inc. (NASDAQ: TSLA) ranks 6th on our list of the best self driving car stocks to invest in.
This July, Goldman Sachs analyst Mark Delaney commented on Tesla, Inc.'s (NASDAQ: TSLA) preliminary Q2 deliveries, stating that the 201,000 deliveries and 206,000 produced vehicles were in line with or surpassed investor expectations from the company. Delaney is optimistic about Tesla, Inc.'s (NASDAQ: TSLA) deliveries and productions now, expecting them to further improve in the third quarter, and has a full-year 2021 deliveries estimate of 875,000 for the company. The firm also has a Buy rating and an $860 price target on Tesla, Inc. (NASDAQ: TSLA).
On June 24th, Tesla, Inc. (NASDAQ: TSLA) confirmed that it would be opening its Supercharger network to other automakers by September next year, and the company currently has over 25,000 Superchargers installed in more than 2,700 stations across the globe. In the first quarter of 2021, Tesla, Inc. (NASDAQ: TSLA) had an EPS of $0.93, beating estimates by $0.15, while its revenue of $10.39 billion, up 73.58% year over year, beat estimates by $112.38 million. The company has a gross profit margin of 21.18% and Tesla, Inc. (NASDAQ: TSLA) has gained 3.41% in the past 6 months.
By the end of the first quarter of 2021, 62 hedge funds out of the 866 tracked by Insider Monkey held stakes in Tesla, Inc. (NASDAQ: TSLA) worth roughly $10 billion. This is compared to 68 hedge fund holders in the previous quarter, with a total stake value of about $12.3 billion.
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Disclosure: None. 10 Best Self Driving Car Stocks to Invest In is originally published on Insider Monkey.
