There is no question that self-driving cars are the future of the automotive space.
IHS Automotive has estimated that within two decades, 10% of the cars sold will offer driverless technology and 76 million cars will have some level of autonomous driving capability.
That means that the self-driving space is a good one for long-term investors who want to reap the benefits of a driverless car revolution. You can invest now as firms ramp up their efforts to gain a solid foothold in the industry.
Here’s a look at four stocks that are poised to make gains as drivers become obsolete.
Driverless Cars Play: Apple Inc. (AAPL)
Several big-name tech firms have driverless cars in their future plans, but Apple Inc. (NASDAQ:AAPL) is a smart pick because the company’s share price is relatively low at the moment.
AAPL stock has been struggling as its iPhone sales deteriorate and investors back away, but Apple has big plans when it comes to autonomous cars.
For two years, Apple has been working on a hush-hush initiative called “Project Titan” that is rumored to be an autonomous car designed to work as a ride-sharing vehicle. The firm has invested $1 billion in China’s version of Uber, Didi Chuxing Technology Co., a move that could make Apple’s autonomous car even more valuable.
The combination of Apple’s technology and Didi’s data collection has the potential to put Apple on top of both the driverless car revolution and the fast-growing ride-sharing space.
Driverless Cars Play: Ford Motor Company (F)
Big-name tech firms aren’t the only ones focusing on the driverless car space — traditional automakers are also buddying up with smaller firms in order to bolster their own autonomous-vehicle programs.
Ford Motor Company (NYSE:F) has done just that by acquiring Israeli artificial intelligence firm SAIPS and promising to deliver a fully autonomous vehicle to the market within the next five years. The cars will start out as options for ride-sharing firms and package delivery services, but as autonomous vehicle technology becomes more widely accepted, they could become available to average users.
One of the reasons to keep an eye on Ford as driverless car technology develops is that the automaker is planning to maintain a focus on affordability.
This will be key as people begin to adopt the new vehicles, because Ford’s fleet will appeal to the masses rather than just the elite few who can afford a luxury car.
Driverless Cars Play: Mobileye NV (MBLY)
Component makers are another good bet when it comes to autonomous vehicle technology, and Mobileye NV (NYSE:MBLY) is a good place to start.
The sensor maker is expected to be a leader in self-driving technology for years to come, and the company gives investors direct exposure to the autonomous vehicle space.
The downside is that MBLY is already highly valued, with a price-to-earnings ratio of 124 and the its announcement that it was partnering with auto parts maker Delphi Automotive PLC (NYSE:DLPH) sent the firm’s share price 6% higher on Tuesday.
However, MBLY is one to buy and hold onto, as investors can expect to see MBLY to continue rising as the chip-maker is poised to remain a leader in the autonomous vehicle space.
Driverless Cars Play: Baidu Inc (ADR) (BIDU)
Chinese search engine Baidu Inc (ADR) (NASDAQ:BIDU) is another good investment option in the driverless car space.
The firm has been pouring money into artificial intelligence over the past few years and is using the technology to develop autonomous driving software, which it has already been testing on outdoor roads.
Much like Alphabet Inc (NASDAQ:GOOGL, NASDAQ:GOOG), BIDU’s dominance as a tech firm puts it in a strong position to develop the software needed to safely operate a driverless vehicle. However, BIDU’s location in China adds to the firm’s investment appeal.
Baidu is one of the only companies designing software specifically for use in China, where the roads are much more crowded and difficult to navigate. That means that once the cars are up and running in China, transitioning that technology to fit U.S. roads will be much easier than trying to do it the other way around.
Not only that, but Chinese regulations make it much easier for BIDU to get cars on the road. The firm’s U.S. counterparts must contend with conflicting state and federal laws that could delay their vehicles’ road readiness.
As of this writing, Laura Hoy was long AAPL and MBLY.