Market experts opine that the transportation world is surrounded by tech-infused transformation, which creates significant opportunities for investors to go long on TaaS (transportation-as-a-service) stocks. The digital transformation that is being experienced by the transportation sector continues to make delivery services more accessible and customized.
As per Introspective Market Research, factors including the need for on-demand, affordable, and eco-friendly transport solutions are expected to drive the growth of the transportation-as-a-service market.
Technological advancements including self-driving cars are some of the prominent factors, with healthy improvement in connectivity. Smart cities and the application of loT, primarily in the transportation sector, should also act as contributing factors.
How Technological Advancements Will Drive Growth of the TaaS Market?
The TaaS market saw a transformative shift over the recent past, courtesy of the integration of Artificial Intelligence (Al) and Machine Learning (ML). Al-powered systems tend to optimize fleet operations by analyzing real-time and historical data, predicting vehicle demand, and suggesting efficient routes. ML algorithms focus on analyzing user behavior, preferences, and travel history to offer recommendations. Therefore, both the technologies, Al and ML, have transformed demand forecasting and predictive analytics.
As per Successive Digital, deep learning models, mainly Recurrent Neural Networks (RNNs) and Long Short-Term Memory (LSTM) networks, are proficient enough to capture temporal dependencies in data, which helps in demand forecasting. Notably, ML models like ARIMA (Autoregressive Integrated Moving Average) and Prophet are used to predict future demand by studying time-series data.
One of the most important trends likely to drive the growth of the TaaS market in 2025 is the rapid adoption of EVs. The global push towards sustainability continues to support the growth of the EV market. Introspective Market Research believes that stringent emission standards set by governments and incentives provided for EVs continue to support the adoption. Furthermore, the development of battery systems focused on enhancing the driving range and cutting down the cost of EVs should make them affordable to consumers.
Next, Mobility as a Service (MaaS) integration should continue to fuel growth in the TaaS market. MaaS platforms focus on the convenience of users by offering a one-stop app where people can locate modes of transport such as buses, trains, bicycles, ride-hailing, etc. As per Introspective Market Research, the evolution of digital technologies like real-time data and analytics, mobile applications, and loT supported the growth of MaaS. These technologies focus on integrating and managing different forms of transport services.
Our Methodology
To list the 10 Best TaaS Stocks to Invest in According to Hedge Funds, we conducted extensive research and scanned through several online rankings. After getting an initial list of 25-30 stocks, we filtered out the ones having high hedge fund holdings. Finally, the shortlisted ones were ranked in ascending order of their hedge fund sentiment, as of Q3 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
9 Best Pizza Stocks to Buy Now
A close up shot of a pizza being freshly made in a restaurant kitchen.
Domino's Pizza, Inc. (NYSE:DPZ) is a global leader in pizza delivery and carryout services, carrying out services via a network of company-owned and franchised stores. The company has integrated advanced logistics and delivery systems into its business model, which aligns it with TaaS principles. As a result of this integration, the company continues to play a significant role in transporting food.
Domino's Pizza, Inc. (NYSE:DPZ)’s performance is assessed not by its revenue but by system sales. From this, the company earns a consistent 10% commission on US retail sales and 3% on international sales, forming the bulk of its gross profit. Domino's Pizza, Inc. (NYSE:DPZ) remains a highly attractive investment opportunity because of its strong market position, consistent profit growth, and innovative approach to both operations and capital allocation.
Domino's Pizza, Inc. (NYSE:DPZ)’s strong business model, combined with its ability to adapt to changing market conditions, places it well for continued long-term success. It has built a reputation as a tech-savvy, innovation-driven company, leveraging creative approaches to fuel growth. Domino's Pizza, Inc. (NYSE:DPZ)’s strong customer data to provide tailored offers and promotions should help order frequency and average ticket size.
A partnership between Domino's Pizza, Inc. (NYSE:DPZ) and DoorDash should significantly support the former’s growth and operations in several strategic ways. DoorDash possesses a vast network of customers who regularly use its platform. Partnering with DoorDash enables Domino's Pizza, Inc. (NYSE:DPZ) to tap into this audience, potentially reaching customers who might not otherwise order directly through Domino's app or website.
Overall DPZ ranks 6th on our list of the best TaaS stocks to invest in according to hedge funds. While we acknowledge the potential of DPZ as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than DPZ but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
