10 Best Self-Driving Technology Stocks To Buy According to Hedge Funds

1. Alphabet Inc. (NASDAQ:GOOGL)

Number of Hedge Fund Investors In Q3 2024: 202

Alphabet Inc. (NASDAQ:GOOGL) is one of the largest technology companies in the world. While it relies primarily on its search engine and advertising to account for nearly 70% of its revenue, the firm also plays a key role in the autonomous driving industry through its Waymo business. Waymo is one of the few companies in the US whose cars regularly travel on roads to finetune their self-driving capabilities. Yet, Alphabet Inc. (NASDAQ:GOOGL) and Waymo have also been dealt setbacks from the inherent risks of autonomous driving platforms being vulnerable to accidents. On the flip side, Waymo’s prowess with self-driving also provides Alphabet Inc. (NASDAQ:GOOGL) with a commanding position in a market that can grow in the future. As a whole, the narrative depends on Alphabet Inc. (NASDAQ:GOOGL)’s dominance in the search engine market and its ability to fend off any legal troubles that might head its way.

Conventum – Alluvium Global Fund mentioned Alphabet Inc. (NASDAQ:GOOG) in its Q3 2024 investor letter. Here is what the fund said:

“Alphabet Inc. (NASDAQ:GOOG), ie Google/YouTube, having returned 20.8% in the June quarter, gave a fair bit of that back by falling 8.8%. Its results seemed pretty positive, and appeared to beat expectations. Management claims its AI integration into its search business is working well, and the margin expansion from costs out is expected to continue. Market chatter suggests that the selloff stems from concerns about the high capital spending on servers and data center equipment. Alphabet has made it clear that this spending is necessary, and somewhat defensive as it can’t risk losing the AI war (a “build it, and they will come” approach). Also, the new Department of Justice case against it probably did not help matters. Nonetheless, we saw no need to adjust our estimates. We wrote last quarter that it traded at a premium to our valuation, but not so much as to warrant selling. With the share price falling and the premium reducing, our view is unchanged. It represents 4.4% of the Fund.”

GOOGL is an autonomous driving stock that hedge funds are interested in. While we acknowledge the potential of GOOGL as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than GOOGL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

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