Autonomous vehicle technology continues to hold massive promise to growth investors. This sector’s compounded annual growth is expected to be above 38% between 2023 and 2032. Thus, investors who get in on the ground floor should reasonably expect substantial returns over the next decade.
Those returns are likely to be highest within stocks that are the riskiest and least diversified. Given that this list is intended for buy-and-hold investors, I haven’t included any firms in that category. These are large, diversified firms that have strong chances of dominating this sector. They won’t rise or fall on autonomous driving alone. In short, they’re safer because they aren’t absolute pure-plays in autonomous driving tech.
With that said, let’s dive into the three autonomous driving stocks I think are worth buying now and holding forever.
| TSLA | Tesla | $264.61 |
| QCOM | Qualcomm | $116.40 |
| GOOG | Alphabet | $123.87 |
Tesla (TSLA)
Tesla (NASDAQ:TSLA) introduced its original autopilot as a standard feature on its vehicles in 2019. Since then, the company, its stock, and its autonomous driving capabilities have all increased.
Tesla refers to its advanced driver assist technology as Full Self-Driving (FSD), although it doesn’t technically allow fully autonomous driving. FSD still requires drivers to have their hands on the steering wheel at all times. Additionally, drivers still have to monitor the remote movements of their vehicles in parking lots.
Nevertheless, Tesla remains a clear choice among long-term stocks to buy in the autonomous vehicle sector. Shares of TSLA stock have proven incredibly resilient in 2023, and have more than doubled year-to-date after starting the year out at around $110 per share.
The company is focused on selling more of its vehicles, lowering prices in 2023 to capture greater market share. That worried some analysts, who fear declining margins could hurt the stock. However, Tesla has since inked deals that will allow all of the major U.S. automotive firms to utilize its chargers. This should lead to greater revenues over the long-term. The company continues to be extremely good at reacting to change, and that’s something I like in a “forever” stock.
Qualcomm (QCOM)
Qualcomm (NASDAQ:QCOM) is primarily known as a chip maker supplying key smartphone manufacturers. Unpredictable growth in that sector has caused QCOM stock to move with volatility in recent months. Indeed, sales of smartphone chip sets are flagging, as demand sags due to bleak economic forecasts and the prospect of a recession.
Yet, at the same time, Qualcomm notes that the automotive industry is a particular growth area for the firm.
Qualcomm launched its Snapdragon ride platform at the beginning of 2020. The 4-nanometer system-on-chip (SoC) is part of a driving stack offers customizable advanced driver assistance systems (ADAS)/autonomous driving solutions for global automakers.
So, while Qualcomm shares have suffered from weakening mobile phone sales, ADAS/AD potential has softened the blow. Further, Qualcomm has taken the opportunity to project potential growth from AI, with investors buying the story. The exposure Qualcomm provides to both autonomous driving and AI is something that investors should get excited about right now.
Alphabet (GOOG)
Alphabet (NASDAQ:GOOG) is best known as the parent of Google and YouTube. However, what’s often forgotten is that the company also owns Waymo, a driverless vehicle business that currently offers robotaxis in Phoenix and San Francisco. Waymo has also announced plans to bring its driverless service to Los Angeles soon.
Alphabet has been testing autonomous driving for over a decade across 10 states. During that time, it has racked up more than 20 million miles of experience and the data that comes with it.
Alphabet is the polar opposite of a pure-play autonomous driving investment. Instead, shareholders receive equity ownership in a firm that is among the highest valued in the world currently. It’s all about search ad revenues and AI growth at the moment. That should ensure that Waymo continues to be extremely well-heeled as it expands its reach in Los Angeles.
One has to imagine that Alphabet has rapid expansion plans waiting in the wings should the opportune moment arrive.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
