Way back in 1982, the world was introduced to crimefighter Michael Knight and his Pontiac Trans Am, KITT. I know we’re all too young to remember this, right? Here’s a recap. Even with David Hasselhoff (formerly the most-watched man on television, according to the Guinness Book of Records) on the show, KITT was arguably the real star.
KITT was a self-driving, artificially intelligent car, complete with silent mode, a comlink, and video display monitors. In other words, KITT was the fictional early version of some of the cars you see on the road today. Of course, KITT also came with a flame thrower and laser guns. For good reasons, you won’t find those on commercially available autonomous vehicles. Still, even though we’re in the very early stages of self-driving cars, when that dam does break, the automakers, suppliers and tech companies shelling out billions on research and development in the autonomous driving space will be flooded with revenues. When it happens, you’ll want to own self-driving car stocks.
But the best way to invest in stocks is to get in early on a trend before it’s too late. And while autonomous driving technology is certainly a hot trend on Wall Street now, it’s not nearly what it will be when we start seeing actual self-driving cars on the roads in a few years. Economists estimate that autonomous driving technology could become a $556 billion industry by 2026. Investing in a revolutionary idea, product or company before it strikes gold is why early investors in Apple (AAPL), Amazon (AMZN), Google (GOOG) and Netflix (NFLX) are all retired and living on yachts right now.
Self-driving cars are the latest revolutionary technology. Thus, investing in self-driving car stocks now could make you a very rich person five, 10 or 15 years from now.
That said, we don’t like to try and predict the future. We like to recommend stocks that already have good-looking charts with plenty of momentum. So, here are three self-driving car stocks that have the right combination of a good chart and a strong foothold in the driverless car industry.
Self-driving car stocks that are on the road to future profits
Self-Driving Car Stock #1: Tesla (TSLA)
Inventors of the luxury electric car for long-distance driving, Tesla is also leading the charge in autonomous driving. Back in 2019, though, many Wall Street pundits were declaring its demise.
Boy were they wrong! Tesla stocks gained 496% since then, including a 60% coronavirus crash. And its semi-autonomous driving system, Autopilot—which could soon allow drivers to literally fall asleep at the wheel while “driving” their cars, according to CEO Elon Musk—is among the many reasons why. It may take longer than Musk expected, but eventually, Tesla will be a big part of the self-driving-car story.
Self-Driving Car Stock #2: Nvidia (NVDA)
Nvidia is best known for the chips it makes for the gaming industry and cryptocurrency. But it also makes system-on-a-chip (SoC) units for the automotive market. Its autonomous driving revenues were down 15% in 2017 as the company transitioned from infotainment system chips in self-driving cars to artificial intelligence cockpit systems. But the company expects huge growth in its driverless car wing, as not only automakers but also ride-hailing companies like Uber debut cars or capabilities that use Nvidia’s chips.
Self-Driving Car Stock #3: Aptiv (APTV)
Spun off from Delphi Automotive in late 2017, Aptiv develops hardware and software designed specifically for driverless car technologies. Its Centralized Sensing Localization Planning (CSLP) platform gives cars semi-autonomous capabilities by using cameras and other artificial intelligence; and the company recently unveiled its new Smart Vehicle Architecture (SVA), a cloud-based setup that makes driverless vehicles easier to assemble.
The long- and short-term patterns in all three of these self-driving car stocks are up. But thanks to the immense potential of the driverless car industry, the recent gains could pale in comparison to their returns over the next five to 10 years.