In this article, we will take a look at the five best self-driving stocks to invest in. If you want to check out a detailed analysis of the market and more stocks, head on to 10 Best Self-Driving Stocks To Invest In.
5. Ford Motor Company (NYSE:F)
Number of Hedge Fund Holders: 46
Ford Motor Company (NYSE:F) is an iconic American car maker that was set up by the legendary Henry Ford in 1903. The company is testing autonomous driving in 10 American cities and it plans to invest $7 billion in the segment by the end of 2025. The firm’s autonomous division is called Ford Next.
Despite the auto sector facing off with historic supply chain disruptions this year, Ford Motor Company (NYSE:F)’s second quarter of 2022 saw the company grow its revenue by 57%, as it managed to beat even Tesla. During the same time period, its unit sales also grew by 35% annually and the firm expects its electric vehicle business unit to grow by 90% during this year, faster than Tesla’s 50% growth. Finally, it also pays a 15 cent dividend for a 3.71% yield.
Citi increased Ford Motor Company (NYSE:F)’s share price target to $16 from $15 in August 2022, sharing that the second quarter results were impressive. 46 of the 912 hedge funds profiled by Insider Monkey for this year’s first quarter had invested in the company.
Ford Motor Company (NYSE:F)’s largest investor is D. E. Shaw’s D E Shaw which owns 31 million shares that are worth $528 million.
Baron Funds mentioned the company in its Q1 2022 investor letter as it shared that:
“Ford (NYSE:F) is another example of typical industrial manufacturing business executive mindsets. The April 18, 2022, Bloomberg Businessweek cover story features Ford CEO Jim Farley behind the wheel of an electrified Ford F-150 Lightning. The article is titled, “Hey Elon, THIS is a truck.” I thought the article was terrific. One idea especially stood out to me. Since the F-150 is such a popular vehicle, it “argued for a gradual approach to electrification. Essentially the company retrofitted an existing F-150 with an electric powertrain rather than develop an entirely new truck.” No all-in financial and operation bet by this company on electrification.”
4. General Motors Company (NYSE:GM)
Number of Hedge Fund Holders: 76
General Motors Company (NYSE:GM) is another iconic American automaker that sells a large variety of vehicles such as trucks and cars, alongside their spare parts. The company plans for its first self-driving car to hit the market in 2025, and the firm has its fleet of self-driving cars under testing. Its first self-driving car, the Cruise Origin will be on the streets in 2023.
General Motors Company (NYSE:GM)’s Cruise is a robotaxi that entered commercial operations in June 2022, and it can serve as a key catalyst for the company. The global robotaxi market is estimated to reach 1.45 million units by 2030 with an eye popping CAGR of 136% and General Motors Company (NYSE:GM)’s experience provides it with the right tools to leverage this segment. The company’s hands free driving technology, Super Cruise, will be extended to more road networks, it announced in August 2022.
76 of the 912 hedge funds profiled by Insider Monkey for their holdings in this year’s March quarter had invested in General Motors Company (NYSE:GM).
Of these, Warren Buffett’s Berkshire Hathaway is the company’s largest investor through a $2 billion stake that comes courtesy of 62 million shares.
Diamond Hill Capital mentioned the company in its Q1 2022 investor letter. Here is what the fund said:
“General Motors—and the auto industry in general—continues to face headwinds related to supply chain disruptions and raw material cost inflation. In addition, uncertainty surrounding global energy markets due to inflation and the conflict in Ukraine has created a greater economic burden on consumers, which tends to slow automotive sales.”
3. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 80
Tesla, Inc. (NASDAQ:TSLA) is the world’s premier electric vehicle manufacturer and seller and it is widely credited to have injected fresh life into the sector after overcoming nearly unsurmountable manufacturing difficulties. It also has one of the most advanced autonomous driving platforms in the market, dubbed Full Self Driving (FSD), which is a key reason behind its stellar market valuation.
Tesla, Inc. (NASDAQ:TSLA) is one of the few companies in the world that does not have to worry about the demand for its products. Instead, a key hurdle for the company is its vehicle price, as more affordable cars stand a better chance of market penetration and on this front, its latest quarterly results show a positive trend. During the quarter, Tesla, Inc. (NASDAQ:TSLA)’s production cost decreased by 10% and is on track for further drops. Finally, the company is also increasing production across its factories in Berlin and Fremont, allowing it to meet more of its demand.
Canaccord raised Tesla, Inc. (NASDAQ:TSLA)’s share price target to $881 from $815 in August 2022, sharing that the company is leading in a variety of areas that make it a “sustainability behemoth”. Insider Monkey studied 912 hedge fund holdings for this year’s first quarter to discover that 80 had held a stake in the company.
Tesla, Inc. (NASDAQ:TSLA)’s largest investor in our database is Jim Simons’s Renaissance Technologies which owns 748,475 shares that are worth $504 million.
Mentioning the company in its Q1 2022 investor letter, Baron Funds outlined that:
“During the first quarter, we bought back shares in Tesla, Inc., which designs, manufactures, and sells electric vehicles, solar products, energy storage solutions, and batteries. We believe that despite the run in the stock over the last few years, Tesla presents a favorable risk/reward profile and remains a Big Idea with only about 1% market share of the automotive market. Since we bought the stock during the first quarter, shares increased 27.1%, despite a complex supply-chain environment, on continued revenue growth and record profitability. Robust demand and operational optimization allow the company to offset inflationary pressures while vertical integration provides flexibility around supply bottlenecks. Moreover, we expect new localized manufacturing capacity to drive additional efficiencies while software initiatives, including the autonomous driving program, are accelerating, offering valuable optionality to the stock.”
2. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 102
NVIDIA Corporation (NASDAQ:NVDA) is one of the largest technology companies in the world that is known for designing and selling graphics processing units (GPUs). The company’s DRIVE Chauffeur platform is an artificial intelligence assisted driving platform that enables autonomous driving. Additionally, its DRIVE Orin computer can power autonomous vehicles by delivering 256 trillion operations per second (TOPS).
Despite the cryptocurrency crash that has dented NVIDIA Corporation (NASDAQ:NVDA)’s shares, its Orin platform is used by Mercedes-Benz as part of the auto company’s first (and the world’s first) level 3 autonomous driving platform. Level 3 does not require the driver to be ready to take over, and even Tesla’s FSD is level 2 – one level below. Not only is Orin the world’s fastest self-driving computer, but NVIDIA Corporation (NASDAQ:NVDA) plans to upgrade this by introducing Atlan, which is expected to be able to compute 1,000 TOPS.
102 of the 912 hedge funds part of Insider Monkey’s Q1 2022 survey had bought NVIDIA Corporation (NASDAQ:NVDA)’s shares.
Ken Fisher’s Fisher Asset Management is NVIDIA Corporation (NASDAQ:NVDA)’s largest investor. It owns 7.3 million shares that are worth $1.9 billion.
ClearBridge Investments mentioned the company in its Q2 2022 investor letter, outlining that:
“Chipmaker Nvidia (NASDAQ:NVDA) has also been pressured by multiple compression of higher growth companies and weakness in its gaming business. While Nvidia has grown into a top 10 position with its strong performance through late 2021, we have been consistently trimming the position to derisk against short-term volatility in its gaming business. The company is clearly exposed to the semiconductor cycle but also participates in the secular growth of cloud and AI adoption through its data center business. With these secular drivers intact and new products ramping up in the second half of the year, we are maintaining an overweight to the company.”
1. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 160
Alphabet Inc. (NASDAQ:GOOG) is among the most prominent technology companies in the world and it is best known for its search engine Google. The company has its toes in the self-driving industry through its subsidiary Waymo, and it started ferrying employees in its driverless Jaguar I Pace vehicles in March 2022.
Alphabet Inc. (NASDAQ:GOOG) has one of the strongest balance sheets in the technology industry – a fact that became clear as its second fiscal quarter of 2022 ended. By H1 2022 end, Alphabet Inc. (NASDAQ:GOOG) had a whopping $125 billion in cash and reserves and its net cash provided by operating activities stood at $95 billion. Combined with low debt, this leaves Alphabet Inc. (NASDAQ:GOOG) with a strong position that allows it to diversify operations in a heartbeat.
Tigress Financial raised Alphabet Inc. (NASDAQ:GOOG)’s share price target to $186 from $183 in August 2022 citing the strong earnings results. Insider Monkey scanned 912 hedge fund portfolios for this year’s first quarter to discover that 160 had bought the company’s shares.
Alphabet Inc. (NASDAQ:GOOG)’s largest investor is Chris Hohn’s TCI Fund Management which owns 2.3 million shares that are worth $6.6 billion.
Wedgewood Partners mentioned the company in its Q2 2022 investor letter. Here is what the fund said:
“Alphabet grew its core search revenues +24% on a +30% year-ago comparison. Despite this stellar top-line performance, shares sold off as the market began to discount fears of a recession. However, the stock has outperformed relative to other holdings as core Google Search has been less affected by disruptions related to Apple’s privacy initiatives. Alphabet’s Cloud segment is generating revenue at a $24 billion run rate but is still running at a loss. We think this business can generate much better margins at some point. In the meantime, the Company has 4% to 5% of shares authorized for repurchase which is an attractive use of capital as the stock trades for about just 18X 2023 consensus estimates.”
Disclosure: None. You can also take a look at 15 Best Energy Stocks to Buy Now and 10 Stocks to Buy According to Francis Chou’s Chou Associates Management.
