Cars and Drivers

Autonomous Driving Is Coming: 6 Stocks May Be Gigantic Winners

Lee Jackson

Published: October 18, 2017 8:15 am

Last Updated: January 12, 2020 7:05 am

In the future, there is a good chance that people will look at the first prototype self-driving cars and laugh, as they will look primitive and clumsy. However, there will be a day in the not-too-distant future where they become ubiquitous and will be the standard we all are accustomed to, and just like virtual reality headsets, they will go from the current bulky and awkward, to sleek and incredible.

In a new research report, the analysts at Jefferies take a deep dive into the world of autonomous driving, and while they concede that wide consumer penetration could be as much as 10 to 15 years or more away, they note that many investors are excited about the fast-moving developments in the technology.

Jefferies points out three major hurdles to adoption:

1. Consumer comfort: The analysts think attitudes can change dramatically after a test ride.
2. Vehicle cost: The initial high cost of the technology, and in turn the new vehicles. It could mean that ride-hailing companies like Uber and Lyft will adopt before individuals do.
3. Government regulation: It is very possible that driverless cars will not be allowed for wide use until the safety of the vehicles is proven beyond the proverbial shadow of a doubt.

While numerous companies will be winners in the field, six look like the leading candidates. Shares of all make sense for aggressive growth accounts looking to the future.

Tesla Inc. (NASDAQ: TSLA) is an obvious choice as the company has been working on the technology for years. The analysts note that the company benefits from what they see as vertical integration and has the ability for a rapid pace of innovation. The 52-week trading range for the shares is $178.29 to $389.61. The shares closed Tuesday at $355.75.

Alphabet Inc. (NASDAQ: GOOGL), via Waymo, has strength in artificial intelligence and the analysts note the company has a long history of research and development for autonomous vehicles. The 52-week range for the technology giant is $743.59 to $1014.76. The shares closed Tuesday at $1011.

General Motors Co. (NYSE: GM) and Ford Motor Co. (NYSE: F) are obvious original equipment manufacturers, and given their investments in Cruise and ARGO AI, respectively, are already working on such vehicles. GM’s 52-week trading range is $30.21 to $46.11, and shares closed Tuesday at $45.02. The 52-week range for Ford is $10.47 to $13.21, and it ended trading on Tuesday at $12.27 a share.

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Delphi Automotive PLC (NYSE: DLPH) is a top tier-one supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company will benefit from demand for autonomous vehicle–related systems. The 52-week range is $60.50 to $104.09. The stock closed most recently at $97.24.

NVIDIA Corp. (NASDAQ: NVDA) is a leading semiconductor company and is moving into visual computing chips for cars, mobile devices and supercomputers. The 52-week range for its shares, which have been on fire, is $65.82 to $98.05. The stock ended trading on Tuesday at $197.75.

It’s not a question of if, but when for the autonomous driving revolution. Once adoption becomes widespread, the technology will increase and jump sequentially on a much faster basis as consumer and business demand will drive more and more innovation. The wave of the future will also have many societal ramifications, many of which have probably not even been considered yet.