5 Best Autonomous Vehicle Stocks to Buy for 2021

Below we presented the list of 5 best autonomous vehicle stocks to buy now. For a detailed discussion as well as a more comprehensive list please see 12 Best Autonomous Vehicle Stocks to Buy For 2021.

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s take a look at the best autonomous vehicle stocks to buy:

5. Nvidia Corporation (NASDAQ:NVDA)

No of HFs: 82

Total Value of HF Holdings: $7.67 Billion

We rank Nvidia Corporation as the top five autonomous vehicles to buy for 2021. The American multi-national company specializes in programmable GPUs that have led breakthroughs in parallel processing which made supercomputing inexpensive and widely accessible. Nvidia was also mentioned as one of the Top 5 Video Gaming Stocks to Buy Now and one of the Top 10 Robotics and Artificial Intelligence Stocks to Buy.

In an article, Wedgewood Partners mentioned that the NVDA acceleration platform can double over the next five years,

“NVIDIA is a pioneer in the development of the graphics processing unit (GPU) – a semiconductor traditionally utilized for rendering computer graphics – and has extended the GPU beyond the graphics domain into “general purpose computing.” We attribute NVIDIA’s success in general purpose computing to their proprietary computing platform and programming model, known as CUDA.

NVIDIA’s compute acceleration platform forms the backbone of a unique value proposition for steadily emerging compute-intensive applications, such as image processing, natural language processing, assisted driving, and ray tracing (the latter relates to the video game domain). The central processing unit (CPU) has been the workhorse of general-purpose computing for decades, as reliable, almost annual efficiency gains helped drive the development of increasingly complex computing applications. As those CPU efficiency gains have slowed over the past several years, developers have begun utilizing GPUs to accelerate applications. While a CPU usually has between a couple and a few dozen cores that are very fast at computation, that contrasts with a CUDA-based NVIDIA GPU that breaks a computation down across hundreds or even thousands of cores and completes it in a fraction of the time. Yet similar to CPUs, and much like Intel’s x86 standard, virtually any industry application can utilize NVIDIA’s GPUs to accelerate performance, thanks to CUDA’s programmability and rich library of software that has been developed for more than a decade.

We expect that the total addressable market served by NVIDIA’s acceleration platform can double over the next five years as data science is increasingly applied in the enterprise, similar to how it has been applied at hyperscale (e.g., Facebook, Google) and scientific computing domains, where NVIDIA has over 90% market share, we estimate. NVIDIA maintains a very high market share in PC and cloud gaming, scientific computing, and hyperscale domains as there are no other GPU-based general compute platforms with software and standardized architectures to rival NVIDIA. Of course, there will be plenty of competitive attempts from alternative silicon providers to accelerate specific computing workloads, namely field-programmable gate arrays (FPGA) as well as other application specific integrated circuits (ASICs); however, we think these offerings lack the standardization and compatibility inherent to NVIDIA’s platform.

The stock has pulled back nearly -40% from its 2018 highs, after growth decelerated from unsustainable levels – driven by a small number of hyperscale operators building inventory. Further, a not insignificant amount of NVIDIA’s revenue over the past few years was generated by cryptocurrency mining applications. As capital fled from cryptocurrency applications, NVIDIA’s revenue from crypto-mining has approached zero and should not be much of a risk going forward. Overall, we think NVDA’s business has bottomed and should be able to sustain faster growth over the next few years. As such, NVIDIA’s fiscal 2021 priceto-earnings multiple is 24X and trading well below its 5-year average of 29X.”

4. Qualcomm, Inc. (NASDAQ:QCOM)

No of HFs: 87

Total Value of HF Holdings: $2.58 Billion

Next-generation vehicles are more safe, wired, intelligent, and location-conscious than ever before thanks to Qualcomm Automotive Wireless Solutions. Qualcomm aims to provide the most powerful 4G/5G, cellular vehicle-to-everything (C-V2X), Wi-Fi, and Bluetooth communication systems, as well as accurate positioning and computing technologies. QCOM was mentioned as one of the 10 US Companies with highest Revenue Exposure To China.

Check out this article where Del Principe O’Brien Financial Advisors mentioned a few comments on the stock,

“When Qualcomm was trading in the low $50s, we bought every share we could. Qualcomm stock rose to around $70 when Broadcom was set to acquire the company, but ultimately the deal did not go through. In April of this year, Qualcomm ended a lengthy and complicated legal battle with Apple over the licensing of Qualcomm’s chip technology in Apple’s mobile devices, including its iPhones. The settlement included a payout from Apple to Qualcomm rumored to be around $6 billion, as well as a six-year licensing agreement and a supply agreement guaranteeing that the chipmaker continue to provide its products to the largest company in the world. With this settlement and the expected increase in product shipments, Qualcomm anticipates an incremental earnings per share of $2. As Qualcomm shareholders, we were able to realize a gain of 54% over a short period of time.”

3. Apple, Inc. (NASDAQ:AAPL)

No of HFs: 134

Total Value of HF Holdings: $127.3 Billion

The biggest tech company in the world, Apple Inc is pushing ahead with self-driving car technology and is targeting 2024 to manufacture a passenger vehicle that could have its own advanced battery technology. Could Project Titan be the main rival of Tesla? We heard the news about Elon Musk reached out to Apple’s CEO Tim Cook for possible acquisition of Tesla’s company shares way back in 2018. This offer from Musk didn’t materialize as Tim Cook snubbed the deal. Apple’s car venture, dubbed Project Titan, has been an open secret in the automotive and technology world since its inception in 2014. The company was mentioned as one of the Top 10 Best Magic Formula Stocks to Buy Now and Top 10 Stocks Americans Searched the Most in 2020.

In an article, Qualivian Investment Partners mentioned their comments on the stock,

“Apple: From a product standpoint, iPhone sales in AAPL’s fiscal Q4 quarter (calendar Q3) missed consensus estimates as customers deferred iPhone 11 purchases in anticipation of the launch of the 5G-enabled iPhone 12 in October, however, iPad and Mac sales continued to benefit from COVID-related work/learn from home trends, with each posting the fastest top line growth rates in the last 5 years. This in combination with continued long-term strength in wearables and services revenue, more than made up for the weakness in iPhone sales, allowing AAPL to beat on the top and bottom lines when they reported the quarter in late October. While the market was somewhat disappointed in AAPL’s lack of iPhone 12 guidance for the upcoming fiscal Q1 2021 quarter, we are optimistic that the iPhone 12 will represent a strong upcoming iPhone sales cycle for AAPL, and that the continued strength in its noniPhone product and service revenue categories (which represented 47% of revenue in the quarter, the highest it has ever been) supports the stock’s rerating and its continued outperformance in the coming years.”

In a separate article, RiverPark Advisors, LCC also highlighted a few stocks and AAPL was one of them,

“Apple: AAPL shares were a top contributor as the company reported record fiscal third quarter results, with revenue up 11% to $60 billion and EPS up 18% to $2.58 – both well ahead of expectations. Revenue was driven by double-digit growth in both Products (up 10%) and Services (up 15%), as well as growth in every geographic segment.

We believe that Apple remains one of the most innovative, best positioned and most profitable companies in what are still the early innings of the mobile technology revolution. Additionally, a fall 5G launch should benefit the company, COVID has highlighted the opportunity for the Apple Watch to be an essential health monitoring device, and the company has rapidly diversified into new high growth and high margin products. AirPods, which were launched only three years ago, are on track to generate $15-$20 billion in revenue this year, 5%-8% of total company revenue. iPhones continue to represent a progressively smaller portion of total revenue (44% of the company’s third quarter revenue, down from 48% a year ago), which should help to lessen the impact of year-to-year iPhone refresh cycles.

At the same time, Services provides robust growth for the company ($13 billion, up 15% yearover-year, and 22% of revenue in the June quarter, and more than $39 billion so far in Apple’s fiscal 2020, is accretive to the company’s margins (Services gross profit grew 20% for the quarter and accounts for 39% of total company gross profit) and adds a large, recurring revenue segment to the company’s business mix. The company maintains a fortress balance sheet with $193 billion of cash, $80 billion net of debt. We expect excess cash flow of more than $60 billion per year, which has been increasingly returned to shareholders through both a growing dividend and increased share repurchases. The company also recently completed a 4 for 1 stock split that was well received by investors.”

2. Alphabet, Inc. (NASDAQ:GOOG)

No of HFs: 162

Total Value of HF Holdings: $14.7 Billion

Alphabet, Inc is headquartered in Mountain View, California. The company has a host of apps and tools tht many consumers use on a daily basis such as google search and google drive.

Check out Tao Value Fund’s comments on GOOG in this article.

“Alphabet (ticker: GOOG) I remain very positive on the long-term future of GOOG. However, I decided to trim slightly to reflect our newest evaluation of the socioeconomic expense (elaborated in our 2019 Q2 letter “General and Market Commentary” section, p3-5). It is still among our top 3 position after the trimming.”

In a separate article, we also mentioned, Baron Opportunity Fund’s comments on the stock,

“Considering solid Fund inflows, we added to long-term holding Alphabet Inc. to maintain its weighting in the portfolio. Alphabet is the parent company of Google, the world’s largest search and online advertising company. We increased our position in Alphabet this quarter as a protracted COVID-19-related recovery in travel and brand advertising presented an attractive buying opportunity. We are encouraged by improving trends in both search and YouTube, driven by durable tailwinds to e-commerce and local advertising, as well as the continued shift of video advertising dollars away from linear television as consumers increasingly cut the cable TV cord. We believe Google is becoming slightly more disciplined in capital allocation than it has been historically. Lastly, Google Cloud, which this quarter achieved a $12 billion revenue run rate under the leadership of Thomas Kurian, is having increasing success competing with larger vendors, due to its strengths in security, open-source, and data analytics.”

Pixabay/Public Domain

1. Microsoft Corporation (NASDAQ:MSFT)

No of HFs: 234

Total Value of HF Holdings: $42.1 Billion

Microsoft Corporation ranks number one on our list of the 12 best autonomous vehicle stocks to buy for 2021. The company produces and markets computer software, personal computers, and related services. MSFT was mentioned as one of the Top 5 Earnings Growth Stocks with Dividends for 2021.

In an article, we mentioned RiverPark Advisors comments on MSFT,

“Microsoft: Microsoft shares were our next top contributor driven by the company’s solid fiscal third quarter results, as well as the strong rebound in technology shares during the month (especially for those firms, like MSFT, that are not currently targets of antitrust investigations ). For its fiscal third quarter (ending March), MSFT’s Commercial Cloud revenue grew 41% yearover-year to $10 billion, generating more than 30% of Microsoft’s total revenue. The company’s two other segments, Productivity and Business Processes and More Personal Computing, grew a combined 14% as overall company revenue grew 16% and Non-GAAP EPS grew 20%.

Microsoft has, we believe, entered a second chapter of market-leading growth that will drive the company’s revenue and profits for years to come. Microsoft’s Cloud Infrastructure offering is in the fastest growing segment of the cloud services market (including software-as-a-service (SaaS)), a market that is characterized by recurring revenues, strong pricing, high levels of customer engagement and high margins. The overall Infrastructure-as-a-Service (IaaS) industry is growing more than 30% per year and is forecast to reach $100 billion of revenues by 2021. We believe that cloud-based services can become the company’s largest revenue and earnings producer and expect Microsoft to generate significant and growing free cash flow ($11 billion last quarter, up 19% year-over-year). The company should deliver at least mid-to-high teens EPS growth, with upside from deploying its $134 billion cash balance ($7 billion was returned to shareholders in the quarter through dividends and share buybacks). We trimmed our position on strength, and Microsoft remains a top five position in in the Fund.”

Please also see 11 Best Lithium and Battery Stocks To Buy, Top 10 Artificial Intelligence Stocks To Buy and 15 Best E-Commerce Stocks to Buy Now