It seems like everybody’s talking about self-driving cars and the automakers that manufacture them lately, but investors shouldn’t forget that these cars will all need microchips. One way to stake your claim in the autonomous vehicle revolution is with a position in Nvidia (NASDAQ:NVDA) stock.
Granted, you’ll hear media pundits raving about Google (NASDAQ:GOOGL, NASDAQ:GOOG) as the undisputed leader in self-driving car technology. I can assure you, however, that Google isn’t the only player in this game — and that the Nvidia stock price could rise dramatically as the competition heats up.
Like Self-Driving Cars? Then You Should Love Nvidia Stock
The fantasy of cars that drive themselves is quickly becoming a reality in modern society. As Lafayette College’s Michael A. Nees explains, engineers and other researchers have advanced self-driving technology to the point where humans are practically irrelevant to the driving experience: “Recent indications have suggested that some design teams believe they can engineer the role of the human operator out of the system altogether.”
This technological progress, as we might expect, has given rise to a nascent industry. The evident leader so far has been Google, whose Waymo subsidiary has been a bellwether in autonomous vehicle tech. However, Nvidia is quickly becoming a credible competitor to Google, to the point where Nvidia could threaten to take market share and topple Google as the leader in the space.
OK, so that might be an exaggeration, but at the very least we can envision the graphics-card company making inroads into the self-driving vehicle market. While Google set the pace with Waymo, Nvidia likewise partnered up with Optimus Ride to test out self-powered public transit in Brooklyn, New York.
Research firm UBS has projected that the world’s autonomous taxi industry will be worth $2 trillion by the year 2030, so I think it’s a savvy move for Nvidia to get into the self-driving vehicle market via the public-transportation angle. Just as important, this initiative will allow the company to test-drive the NVIDIA DRIVE AGX Xavier, which Nvidia describes as “the world’s first processor designed for autonomous driving” with “six different types of processors to run redundant and diverse algorithms for AI, sensor processing, mapping and driving.”
Pushing Self-Driving Boundaries
While the Optimus Ride initiative is impressive, Nvidia is persistent in exploring the potential of self-driving vehicle chips. To this end, Nvidia has joined forces with Toyota (NYSE:TM), General Motors (NYSE:GM), and other leaders in the tech and/or automotive sectors to form the Autonomous Vehicle Computing Consortium, or AVCC.
The AVCC launch at San Jose, California’s Arm TechCon marked the start of a massive, industry-wide collaboration to expedite the mainstreaming of self-driving automotive technology with better, faster chips and other essential components. AVCC Board Chairman Massimo Osella appreciated the enormity of the task faced by the burgeoning industry, as well as its importance:
“The massive amount of technological innovation required to power fully self-driving vehicles at scale requires collaboration at an industry level… We are delighted to join this group of key leaders in the automotive industry. As the AVCC, we are working together to create the ‘go to’ organization for autonomous computing expertise to help bring this technology to market.”
Nvidia Automotive Hardware and Software Systems Senior Vice President Gary Hicok likewise expressed the ambitious nature of the collaboration, along with Nvidia’s eagerness to move the technology forward:
“The hardware and software requirements for autonomous vehicles are enormous, requiring an energy-efficient, high-performance AI platform to process sensor data and achieve the highest levels of safety… As the leader in AI computing, we are working closely with transportation innovators, tackling the complexities of developing and deploying safe autonomous vehicles at scale.”
The Takeaway on Nvidia Stock
Joining in the AVCC and getting a head start in autonomous public transportation are emblematic of Nvidia’s willingness to take initiative in what’s clearly a growth industry. NVDA stock might not go up today or tomorrow, but in time I suspect that shareholders will reap the rewards of Nvidia’s early and powerful move into self-driving technology.
As of this writing, David Moadel did not hold a position in any of the aforementioned securities.