15 Best Self Driving Car Stocks To Buy Now

Published on November 25, 2022 at 7:41 am by Mohammed Saqib in Hedge Funds, News

In this article, we will discuss the 15 Best Self Driving Car Stocks To Buy Now. You can skip our detailed analysis of the autonomous car industry and go directly to the 5 Best Self Driving Car Stocks To Buy Now.

While automation was a niche technology almost exclusive to the manufacturing side in the previous years, today, it has permeated into every industry. The automotive industry is one such industry where automation is having a long-lasting impact, as self-driven cars continue to attain immense popularity owing to their several benefits and unique advantages. The autonomous car industry sees bright aspects ahead, presenting the world with endless possibilities for improving living standards and enhanced convenience. It would serve to provide independence to elderly and physically disabled individuals. With an increasing focus on environmental safety in light of global warming trends, autonomous cars are bound to stay in the limelight with their ability to reduce traffic congestion and carbon emissions globally.

Key drivers for the industry will be a growing demand for a secure and convenient driving experience, inflating disposable income, strict safety regulations worldwide, and increased government mandates concerning driver-assistance systems. With further technological advancements contributing to the availability of appropriate infrastructure for the self-driving industry and growing government support for the industry globally, robust growth across the self-driving cars segment is expected in the future.

The global market for autonomous cars is projected to surpass around 65 million units by 2030 and swell at a CAGR of 13.38% from 2022 to 2030, according to a report by the US-based company Precedence Research, Inc. By 2030, the Asia Pacific region is anticipated to hold the largest market share in the self-driving cars industry, with an ever-increasing penetration, followed by Europe and North America.

An increasing number of companies are now directing their resources toward automated vehicles. Commercial adoption of self-run cars is underway as inclusive urban mobility, and sustainability principles are gaining ground worldwide. Key players in the autonomous car industry are General Motors Company (NYSE:GM), Apple Inc. (NASDAQ:AAPL), Alphabet Inc. (NASDAQ:GOOGL), and Mercedes-Benz.

Photo by ThisisEngineering RAEng on Unsplash

Our Methodology

To curate this list, we picked shares from iShares Self-Driving EV and Tech ETF and ranked them from #15 to #1 by the number of hedge funds holders in each stock in our database.

Best Self Driving Car Stocks To Buy Now

15. Autoliv, Inc. (NYSE:ALV)

Number of Hedge Fund Holders: 34

Autoliv, Inc. (NYSE:ALV) is a renowned developer, producer, and supplier of automotive safety systems with a diverse product offering. The company offers passive safety systems that comprise components and modules for frontal-impact airbag protection systems, side-impact airbag protection systems, seatbelts, inflator technologies, battery cable cutters, and pedestrian and cyclist protection systems. Autoliv, Inc. (NYSE:ALV) has approximately 65 manufacturing locations in 25 countries, and its customers include the world’s top automobile manufacturers. Autoliv, Inc. (NYSE:ALV) is developing external airbags for Nuro’s new third-generation autonomous delivery vehicle.

On October 24, 2022, Emmanuel Rosner, an analyst at Deutsche Bank, increased his price target on Autoliv, Inc. (NYSE:ALV) to $94. The analyst has a Buy rating on the stock and believes that the company’s Q3 results are encouraging and drive more optimism regarding the company’s production environment.

In addition to Autoliv, Inc. (NYSE:ALV), NVIDIA Corporation (NASDAQ:NVDA), QUALCOMM Incorporated (NASDAQ:QCOM), and Apple Inc. (NASDAQ:AAPL) are included in our list of 15 best self driving car stocks to buy now.

Autoliv, Inc. (NYSE:ALV) recently reported result for Q3 2022. Speaking on the results, CEO Mikael Bratt said in a statement:

Our strong performance in the third quarter is especially encouraging considering the market conditions continued to be challenging with almost 2 percentage points adverse currency effects, as well as significant inflationary pressure and high customer call off volatility. We generated a strong operating cash flow. The leverage ratio improved to 1.6 times. In the quarter, we paid $0.64 per share in dividends and repurchased and canceled 260,000 shares.

Our Q3 performance enables us to update our full-year indication for the adjusted operating margin to the upper-end of the indication. We expect continued sequential margin improvement in Q4 through price increases, cost reduction activities, as well as the higher LVP and engineering income. The Q3 performance and expected Q4 development strengthens our confidence in our mid-term targets. In addition, we expect that our balance sheet and positive cash flow trend will allow for higher shareholder returns.

14. Coherent Corp. (NASDAQ:COHR)

Number of Hedge Fund Holders: 36

Founded in 1966 in California, Coherent Corp. (NASDAQ:COHR) develops, produces, and markets engineered materials, optoelectronic components, and devices for use in end markets such as consumer electronics and automotive applications. The company’s advanced driver-assistance systems enable safe and autonomous driving. Coherent Corp. (NASDAQ:COHR) delivers laser sources, optics, and thermal-management solutions for sensors used in a wide range of system applications for short- to long-range object detection. The company’s VCSELs are essential in Lidar and sensing systems, which self-driving automobiles utilize to monitor the ever-changing environment data. The company’s revenue in fiscal 2021 stood at $3.1 billion.

On November 10, 2022, Richard Shannon, an analyst at Craig-Hallum, increased his price target on Coherent Corp. (NASDAQ:COHR) to $60. The analyst has a Buy rating on the company and stated that the company’s forward guidance and outlook of the operating environment remain robust compared to others as datacom revenues continue to drive strong results.

Carillon Tower Advisers made the following comment about Coherent Corp. (NASDAQ:COHR) in its Q3 2022 investor letter:

Coherent Corp. (NASDAQ:COHR), formerly known as II-VI, is a diversified technology company that provides optical components for telecommunications infrastructure products used in data centers and next-generation 5G networks. The stock pulled back due to macroeconomic concerns as well as due to its variable debt exposure, given the rising interest rate environment. However, the company’s management team remains committed to realizing acquisition synergies and paying down debt quickly, and has hedged nearly half of its interest rate exposure.

13. Aptiv PLC (NYSE:APTV)

Number of Hedge Fund Holders: 39

Aptiv PLC (NYSE:APTV) is an Irish-American multinational technology and mobility architectural firm primarily serving the automotive industry. The company provides end-to-end mobility solutions to its customers, allowing them to migrate to increasingly electric and software-defined cars. Aptiv PLC (NYSE:APTV) creates the software and hardware underpinning for vehicle features and functionality by designing and manufacturing vehicle components and providing electrical and active safety technology solutions to automotive and commercial vehicle companies. Aptiv PLC (NYSE:APTV) joint venture with Hyundai and Motional, Inc., continues to design and commercialize autonomous vehicles and systems. Motional announced IONIQ 5-based robotaxi, which will be available in 2023.

On September 28, 2022, Jared Maymon, an analyst at Berenberg, initiated coverage of Aptiv PLC (NYSE:APTV) with a Buy rating and a price target of $130. The analyst stated in the report that Aptiv PLC (NYSE:APTV) continues to capture additional market share as the focus on electric vehicles continues to increase.

Aptiv PLC (NYSE:APTV) was mentioned in the Q1 2022 investor letter of ClearBridge Investments. Here’s what the firm said:

The acceleration in electrification of transport should support electric vehicle (EV)-related stocks like Aptiv (NYSE:APTV), which came under pressure in the quarter on concerns the auto cycle is past its peak. Aptiv provides a range of solutions for the auto industry, including autonomous driving technologies, safety technologies, components, and wiring. The large exposure of APTV to EVs should lead to long-term value as EVs continue their growth, boosted by their relative attractiveness as prices at the pump hit near-historic highs.

12. ON Semiconductor Corporation (NASDAQ:ON)

Number of Hedge Fund Holders: 45

ON Semiconductor Corporation (NASDAQ:ON) is an American company that provides intelligent sensing and power solutions. ON Semiconductor Corporation (NASDAQ:ON) works in the autonomous vehicle’s sensor space providing Lidar tech, radar, and cameras. The company’s intelligent power technologies allow the automotive industry’s electrification, allowing for lighter and longer-range electric vehicles.

On November 15, 2022, Chris Caso, an analyst at Credit Suisse, initiated coverage of ON Semiconductor Corporation (NASDAQ:ON) with a Neutral rating and a price target of $83. The analyst stated that it is likely that the company’s stock will offer a better entry point in the first half of 2023, which is why he remains neutral for now on the stock.

Here is what ClearBridge Investments Mid Cap Strategy has to say about ON Semiconductor Corporation (NASDAQ:ON) in its Q3 2022 investor letter:

Our IT holdings also positively contributed to relative performance versus the benchmark. ON Semiconductor (NASDAQ:ON) was boosted during the quarter by high demand for auto semiconductors used in sensing and power management modules amid global chip shortages and tight supply chains.

11. Ford Motor Company (NYSE:F)

Number of Hedge Fund Holders: 47

Ford Motor Company (NYSE:F) is an American multinational vehicle manufacturer based in Dearborn, Michigan. Ford Motor Company (NYSE:F) develops, manufactures, markets, and services Ford trucks, sedans, sports vehicles, and electrified vehicles globally. It operates in three divisions: Automotive, Mobility, and Ford Credit. The Mobility division develops self-driving technology and designs and builds mobility services. Ford Motor Company (NYSE:F) purchased a majority stake in Argo AI, a self-driving car startup, in February 2017.

Ford Motor Company (NYSE:F) recently reported Q3 2022 results posting revenue of $39.4 billion, recording an increase of 10% YoY from the same period last year. The company posted a net loss of $827 million during the quarter as the company continued to be affected by supply-chain challenges.

Here’s what Leaven Partners said about Ford Motor Company (NYSE:F) in its Q3 2022 investor letter:

In our last quarterly letter, I briefly mentioned that the consensus estimates for corporate profits appeared to be a bit too sanguine. I referenced a Reuters article that reported, as of June 17, Wall Street expected S&P 500 earnings to grow by 9.6% in 2022, which was up from 8.8% in April and from 8.4% in January. That tune began to change at the end of July and accelerated in August and September, as major players, such as Ford (NYSE:F), has recently issued profit warnings and/or have withdrawn guidance. In response, Wall Street has altered its outlook: lowering third-quarter profit growth to 4.6%^[2] from 7.2% in early August and slashing full-year profit growth to 4.5%.

10. Eaton Corporation plc (NYSE:ETN)

Number of Hedge Fund Holders: 47

Eaton Corporation plc (NYSE:ETN) is an American-Irish worldwide power management corporation that offers energy-efficient electrical, hydraulic, and mechanical power solutions. The vehicle segment of the company is responsible for the design, production, marketing, and supply of drivetrain and powertrain systems, as well as crucial components that reduce emissions and increase fuel economy, stability, performance, and safety in automobiles.

On November 02, 2022, Joshua Pokrzywinski, an analyst at Morgan Stanley, increased his price target on Eaton Corporation plc (NYSE:ETN) to $174. The analyst currently has an Overweight rating on the stock and believes that growth in Electrical Americas orders and a decrease in raw material prices could lead to an increase in stock price.

9. Albemarle Corporation (NYSE:ALB)

Number of Hedge Fund Holders: 49

Albemarle Corporation (NYSE:ALB) is a global leader in the designing, manufacturing, and marketing of highly tailored specialty chemicals for a wide range of end markets. The Lithium division creates lithium-based products for various sectors and end markets. Lithium is critical in many products and industries, including lithium batteries used in consumer electronics and electric vehicles. Albemarle Corporation (NYSE:ALB) posted a revenue of $3.3 billion in 2021.

On November 03, 2022, Albemarle Corporation (NYSE:ALB) reported results for the third quarter of 2022, posting revenues of $2.09 billion, an increase of 151% YoY from Q3 2021. The Normalized EPS of $7.50 beat the market estimate by $0.51.

Carillon Tower Advisers made the following comment about Albemarle Corporation (NYSE:ALB) in its Q3 2022 investor letter:

Albemarle Corporation (NYSE:ALB) is a global specialty chemicals company with leading positions in lithium, bromine, and refining catalysts. The company’s shares outperformed meaningfully in the quarter, driven largely by robust demand for lithium used to manufacture electric vehicle batteries. Albemarle is well-positioned for the accelerating adoption of electric vehicles and could benefit from the Inflation Reduction Act.

8. NXP Semiconductors NV (NASDAQ:NXPI)

Number of Hedge Fund Holders: 52

NXP Semiconductors NV (NASDAQ:NXPI) is a Dutch semiconductor firm with a wide range of products and services that include cryptography security and high-speed interface. Product solutions from the company are used in various end-market applications, including automotive, industrial & communication infrastructure. NXP Semiconductors NV (NASDAQ:NXPI)’s advanced driver assistance systems provide safe and increasingly autonomous experiences, which include radar, Lidar, vision sensing, and a V2X system. NXP Semiconductors NV (NASDAQ:NXPI)’s sales during 2021 stood at $11.06 billion.

On November 02, 2022, Christopher Rolland, an analyst at Susquehanna, reduced his price target on NXP Semiconductors NV (NASDAQ:NXPI) to $175. The analyst keeps a Neutral rating on the company’s stock due to concerns over a macro slowdown.

7. Intel Corporation (NASDAQ:INTC)

Number of Hedge Fund Holders: 69

Intel Corporation (NASDAQ:INTC) is a multinational corporation that designs and sells computer goods and technology worldwide. In 2017, Intel Corporation (NASDAQ:INTC) acquired Mobileye Global Inc., which is a leading provider of driving assistance and self-driving systems. Mobileye Global Inc.’s product range includes computation platforms, computer vision, machine learning-based sensing, mapping and localization, and active sensors in development, covering the whole stack required for assisted and autonomous driving. Intel Corporation (NASDAQ:INTC)’s sales in 2021 stood at $79.0 billion.

On October 31, 2022, Tristan Gerra, an analyst at Baird, reduced his price target on Intel Corporation (NASDAQ:INTC) to $34. The analyst keeps a Neutral rating on the stock and believes that despite the slowing revenue growth, the company will be able to post the expected EPS in 2023.

ClearBridge Investments made the following comment about Intel Corporation (NASDAQ:INTC) in its Q3 2022 investor letter:

Also on the detractor side, Intel Corporation (NASDAQ:INTC) delivered a disappointing revenue miss and lowered full-year revenue and earnings guidance as COVID-19-driven demand for PCs abated (where Intel enjoys half its sales) and a delay in its flagship Sapphire Rapids CPU hurt its data center business. Despite these issues, we still believe Intel is an economically sensitive turnaround story with substantial upside.

6. General Motors Company (NYSE:GM)

Number of Hedge Fund Holders: 74

General Motors Company (NYSE:GM) is an American automaker that designs, manufactures, and sells trucks, crossovers, cars, and automobile components, as well as software-enabled services and subscriptions worldwide. Cruise is the company’s global segment responsible for developing and commercializing software and hardware autonomous car technologies such as light detection and ranging sensors and other components. General Motors Company (NYSE:GM) revenue in 2021 was reported at $127.0 billion.

On October 26, 2022, Ryan Brinkman, an analyst at JPMorgan, increased his price target on General Motors Company (NYSE:GM) to $59. The analyst kept an Overweight rating on the stock and stated that the strong performance in Q3 shows the strength of the company in the current macro-environment.

Oakmark Funds, an investment management firm, has released its first-quarter 2022 investor letter and mentioned General Motors Company (NYSE:GM). Here is what the fund said:

General Motors (NYSE:GM) was a detractor during the quarter, due to increased macro uncertainty, higher fuel prices, and concerns over rising input costs, which pressured the company in particular and the auto industry as a whole. While we are closely monitoring the potential impact of these dynamics, industry demand remains robust, driven by strong consumer balance sheets and pent-up demand after multiple years of constrained production. We also remain confident in GM’s ability to navigate a complex operating environment, which the company has consistently demonstrated over the past few years. Finally, the long-term picture remains bright. We believe GM is significantly undervalued, is well-positioned for the long-term transition to electric vehicles and has numerous needle-moving ancillary business opportunities (most notably Cruise, which is an industry leader in autonomous vehicle technology) that are underappreciated.

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