10 Best Autonomous Driving Stocks To Buy According To Short Sellers

6. NXP Semiconductors N.V. (NASDAQ:NXPI)

Short Interest as % of  Shares Outstanding: 1.34%

Number of Hedge Fund Investors In Q2 2024: 52

NXP Semiconductors N.V. (NASDAQ:NXPI) operates on the hardware side of the autonomy industry. It makes and sells radar processing systems, radar transceivers, safety processors, and system on chip (SoC) packages that are used in ADAS platforms. NXP Semiconductors N.V. (NASDAQ:NXPI) is one of the biggest automotive chip suppliers in the world. Since the semiconductor industry is built on long term partnerships as semiconductor fabrication firms and OEMs work together for chip design, this offers it considerable leverage in capturing chip and related product orders stemming from the growth in autonomous vehicles. Additionally, the semiconductor industry is also capital intensive, which reduces the risk of new entrants threatening to take NXP Semiconductors N.V. (NASDAQ:NXPI)’s business away. However, high exposure to the automotive industry leaves the firm vulnerable to cyclical downtrends and any inventory buildups, despite the fact that NXP Semiconductors N.V. (NASDAQ:NXPI) also operates in the IOT and communications industries.

NXP Semiconductors N.V. (NASDAQ:NXPI) is currently busy managing its inventory as management shared during the Q2 2024 earnings call:

“With that, our quarter 3 guidance assumes approximately 1.8 months of distribution channel inventory. However, we will not grow channel inventory back to anywhere near our long-term target of 2.5 months within this calendar year. As a result, we will continue to stage inventory in a very controlled and targeted manner in the channel. Taken together, the second half will grow over the first half with the potential outcome for 2024 to be a modest annual revenue decline in the low single digit range. This is toward the low end of our earlier expectations because of the more persistent and deep inventory digestion at our auto Tier 1 customers and due to the continued weakness in our core industrial markets in Europe and the Americas. Before turning the call over to Bill, I would like to highlight what I believe is a truly strategic long-term investment for our hybrid manufacturing strategy.”