In this piece, we will take a look at the 12 best autonomous driving stocks to buy now. If you want to skip our overview of autonomous driving and how it’s one of the most important sectors today especially when we consider the hype surrounding artificial intelligence, then you can take a look at the 5 Best Autonomous Driving Stocks To Buy Now.
The biggest trend in the stock market these days is artificial intelligence. While data science has been an industry for years, artificial intelligence has come to the public’s attention only because of OpenAI’s massive success with ChatGPT. Before ChatGPT became available for public use, data science was primarily used in industrial cases such as supply chain management, drug and vaccine development, fraud detection, and others.
Another application that relies heavily on data science is autonomous driving. Autonomous driving is the technology that relies on a computer to aid a driver while they’re on the road, and the industry has been able to progress quite a bit over the past couple of years. In fact, the same drivers of the A.I. wave, i.e. semiconductors designed and sold by firms such as NVIDIA Corporation and Advanced Micro Devices, Inc. (NASDAQ:AMD), are also behind the rapid progress of autonomous driving systems.
These systems are made by public and private companies, and the former are traded on the stock markets as autonomous driving stocks. Autonomous driving stocks are those companies whose hardware or software is present in autonomous driving systems, or whose business operations are indispensable to the functioning of the autonomous driving industry. The potential of car makers to continuously gather data from every vehicle as it is being driven and then use this data to train algorithms that are capable of making driving decisions on their own has proven to be quite beneficial to autonomous driving stocks.
In fact, the world’s most valuable car maker in terms of market capitalization, the Austin, Texas based electric vehicle manufacturer Tesla, Inc. (NASDAQ:TSLA) owes, some, if not most, of its market value to the simple fact that the firm’s first principles driven approach led by its chief Elon Musk has enabled it to also operate as a technology company. This has made Tesla the world’s most valuable autonomous driving stock, and the firm’s massive market capitalization of $588 billion is based on its production systems and the massive amounts of data it has at its disposal to train its autonomous driving product, the Tesla Full Self Driving (FSD) platform.
However, while Tesla’s FSD continues to remain functional and operational despite the daily dose of controversy surrounding it, 2024 has also seen some other autonomous driving stocks struggle. One such autonomous driving stock is General Motors Company (NYSE:GM), whose Cruise autonomous driving system underwent a tragic accident in October last year that led California to pull its permits. Since then, a crucial GM update provided in January 2024 has created uncertainty about Cruise’s future, and some quarters worry whether it will be able to regain compliance by the end of this year, especially after having laid off 25% of its workforce.
Since Tesla’s FSD is in a world of its own, its rivals such as GM compete with each other. Another mega cap stock that is also an autonomous driving stock is none other than the consumer technology behemoth Alphabet Inc. (NASDAQ:GOOGL). Now structured as a holding company that makes money from or funds the losses of a variety of lucrative business, one such Alphabet division is Waymo. When it comes to California, Waymoe and Cruise account for 99% of the test driving miles in 2023. And now, as Cruise’s future becomes uncertain, Waymo has the ‘road clear’ when it comes to develop autonomous driving technologies.
As for Cruise, here is what General Motors had to say during the firm’s latest earnings call:
Our plan 2024 investment in Cruise reflects our more deliberate and cadence go-to-market strategy and we are developing new financial targets and a new roadmap. Spending will be down considerably this year, but we will continue to invest in the people who are advancing the software, specialized hardware, and AI capabilities. This reflects our commitment to our vision, which is to deliver the safety benefits of self-driving technology and a scalable, profitable business. I look forward to sharing our timetable for returning Cruise EVs to the road soon. To summarize, we learned a lot in 2023, and those learnings are helping us build our strengths and addressing our challenges. Everyone on the team is committed to building on our momentum and creating shareholding value.
You’ll see in our proxy statement this spring, executive compensation is tied even more closely to delivering our comprehensive ICE, EV, AV, and software plans, while meeting our financial targets. So our goals are truly aligned with yours. Before I turn the call over to Paul, I would like to share some thoughts about our next Investor Day. Because of the significant changes that are underway at GM and Cruise, we think it makes sense to wait until later in the year to host an event. This will give our software team the time to focus on software for our upcoming launches, and we will be able to share more tangible proof points on all four pillars of our strategy, ICE, EV, AV, and software. When we do get together, we will show you what we’ve done, not just tell you what we’re going to do.
With these details in mind, let’s take a look at the best autonomous driving stocks to buy. Some top autonomous driving stocks are Alphabet Inc. (NASDAQ:GOOGL), NVIDIA Corporation (NASDAQ:NVDA), and Microsoft Corporation (NASDAQ:MSFT).
An auto warehouse filled with newly acquired used cars.
Our Methodology
To make our list of the best autonomous driving stocks to buy, we ranked the top 20 autonomous driving stock holdings of the Global X Autonomous & Electric Vehicles ETF by the number of hedge funds that had bought the shares during Q3 2023. Out of these, the top stocks were selected.
For these best autonomous driving stocks, we used hedge fund sentiment. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
12 Best Autonomous Driving Stocks To Buy Now
12. Aptiv PLC (NYSE:APTV)
Number of Hedge Fund Shareholders In Q3 2023: 38
Aptiv PLC (NYSE:APTV) is a backend car company that makes and sells products that are used in autonomous driving systems. After posting strong fourth quarter of 2023 financial results that saw it beat analyst profit estimates, Aptiv PLC (NYSE:APTV) also announced that it is reducing its stake in a joint venture with Hyundai after having bled money for quite a while.
In the previous quarter, Insider Monkey’s survey covering 910 hedge funds revealed that 38 had held a stake in Aptiv PLC (NYSE:APTV). Ian Simm’s Impax Asset Management was the firm’s largest shareholder due to its $668 million investment.
Along with Alphabet Inc. (NASDAQ:GOOGL), NVIDIA Corporation (NASDAQ:NVDA), and Microsoft Corporation (NASDAQ:MSFT), Aptiv PLC (NYSE:APTV) is a top autonomous driving stock.
11. NXP Semiconductors N.V. (NASDAQ:NXPI)
Number of Hedge Fund Shareholders In Q3 2023: 41
NXP Semiconductors N.V. (NASDAQ:NXPI) is a Dutch semiconductor company that makes and sells chips such as processors and controllers. This makes it an autonomous driving stock since the products are indispensable to any self driving system. The shares are rated Buy on average and the average analyst share price target is $233.84.
As of September 2023 end, 41 out of the 910 hedge funds tracked by Insider Monkey were the firm’s shareholders. NXP Semiconductors N.V. (NASDAQ:NXPI)’s biggest investor in our database is Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC as it owns $157 million worth of shares.
10. Ford Motor Company (NYSE:F)
Number of Hedge Fund Shareholders In Q3 2023: 43
Ford Motor Company (NYSE:F) is one of the biggest car companies in the world and part of America’s big three. The firm has several self driving projects, including those being tested for military use and operational in the U.K. Its latest sales report saw electric vehicle sales drop in the U.S. at a time when traditional cars manage to weather the tough economy.
By the end of last year’s third quarter, 53 out of the 910 hedge funds profiled by Insider Monkey had bought and owned Ford Motor Company (NYSE:F)’s shares. Ken Fisher’s Fisher Asset Management was the largest shareholder through its $690 million stake.
9. ON Semiconductor Corporation (NASDAQ:ON)
Number of Hedge Fund Shareholders In Q3 2023: 53
ON Semiconductor Corporation (NASDAQ:ON) is an American semiconductor firm headquartered in Scottsdale, Arizona. Despite a slowdown in the chip industry, the firm has been doing well on the financial front as of late since it has beaten analyst EPS estimates in all four of its latest quarters.
Insider Monkey dug through 910 hedge fund portfolios for their third quarter of 2023 shareholdings and found that 53 had invested in the firm. ON Semiconductor Corporation (NASDAQ:ON)’s biggest hedge fund investor is Ken Griffin’s Citadel Investment Group due to its $232 million stake.
8. General Motors Company (NYSE:GM)
Number of Hedge Fund Shareholders In Q3 2023: 66
General Motors Company (NYSE:GM) is another major American traditional car company. It’s also one of the biggest autonomous driving stocks in the U.S., but recent regulatory troubles have put the division’s future in doubt.
During September 2023, out of the 90 hedge funds tracked by Insider Monkey, 66 had held a stake in General Motors Company (NYSE:GM). Natixis Global Asset Management’s Harris Associates was the biggest shareholder, owning 35 million shares that are worth $1.1 billion.
7. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Shareholders In Q3 2023: 67
QUALCOMM Incorporated (NASDAQ:QCOM) is an American chip designer that makes and sells GPUs and other products used in autonomous driving cars. Its earnings report for the fourth quarter was a strong set of results that saw QUALCOMM Incorporated (NASDAQ:QCOM) beat analyst EPS estimates by a robust 25%.
By the end of 2023’s third quarter, 67 out of the 910 hedge funds profiled by Insider Monkey were the firm’s investors. QUALCOMM Incorporated (NASDAQ:QCOM)’s largest hedge fund stakeholder is John Overdeck and David Siegel’s Two Sigma Advisors through its $362 million investment.
6. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Shareholders In Q3 2023: 70
Intel Corporation (NASDAQ:INTC) is the world’s biggest semiconductor company that also has a sizeable presence in the autonomous driving industry through its Mobileye subsidiary. However troubles with maintaining a technological lead in the industry have led analysts to be cautious, as Intel Corporation (NASDAQ:INTC)’s shares are rated Hold on average.
70 out of the 910 hedge funds covered by Insider Monkey’s Q3 2023 research had bought Intel Corporation (NASDAQ:INTC)’s shares. William B. Gray’s Orbis Investment Management was the biggest investor courtesy of its $468 million stake.
NVIDIA Corporation (NASDAQ:NVDA), Intel Corporation (NASDAQ:INTC), Alphabet Inc. (NASDAQ:GOOGL), and Microsoft Corporation (NASDAQ:MSFT) are some best autonomous driving stocks according to hedge funds.
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Disclosure: None. 12 Best Autonomous Driving Stocks To Buy Now is originally published on Insider Monkey.