7 Best Auto Components and Parts Stocks to Buy Right Now

1. BorgWarner Inc. (NYSE:BWA)

Number of Hedge Fund Holders: 41

Topping our list of best auto components and parts stock is BorgWarner Inc. (NYSE:BWA), an automotive and e-mobility solutions company headquartered in Michigan. Its products improve vehicle performance, efficiency, and air quality. It primarily supplies OEMs of light and commercial vehicles, as well as aftermarket customers worldwide. The company operates manufacturing facilities across Europe, the Americas, and Asia, serving nearly every major automotive OEM.

In 2021, the company introduced its “Charging Forward” strategy to expand its EV product portfolio through investments and acquisitions. By 2027, the company aims to achieve over $10 billion in annual sales from its eProducts. As part of this strategy, the company completed acquisitions of key businesses, including Eldor’s Electric Hybrid Systems, Hubei Surpass Sun Electric’s charging business, and Drivetek AG, strengthening its EV and hybrid technologies.

In July, BorgWarner (NYSE:BWA) secured its largest North American contract for its high-voltage eFan system, designed for heavy and medium-duty BEVs from a major global OEM. Production is set to begin in late 2027. The eFan system, which includes a fan, e-motor, and integrated high-voltage inverter, delivers up to 10 kW of power and 40 Nm of torque, with options for varying power needs.

Its components are liquid-cooled for long-term reliability and offer reduced noise levels. The system supports voltage ranges from 550V to 850V and is scalable for different commercial vehicle applications, including BEVs and fuel cell vehicles.

On October 14, The Fly reported that Evercore ISI upgraded BorgWarner (NYSE:BWA) stock from In Line to Outperform and raised the price target from $39 to $43. The firm explained that despite many auto investors showing limited interest in the sector due to ongoing market volatility, its approach focuses on maintaining a defensive stance as a strong strategy.

While we acknowledge the potential of BorgWarner Inc. (NYSE:BWA) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than BWA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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