Autonomous Driving Stocks Show Promising Long-Term Potential as Market Grows

The potential for long-term growth in autonomous driving stocks is becoming increasingly appealing as the market continues to expand. With projections indicating that over 54 million cars will be equipped with self-driving technology by 2024, the market is expected to grow from $24 billion in 2021 to $62 billion in 2026.

Favorable regulatory actions are also contributing to the success of autonomous driving stocks in several locations. The US National Highway Traffic Safety Administration has simplified AV testing and deployment by altering its standards. California and Arizona have established significant AV testing and operation infrastructures for public roads. Additionally, the Chinese government provides tax advantages and subsidies for research and development in the autonomous vehicle ecosystem, further supporting the industry.

Major corporations such as Amazon are actively participating in the autonomous driving sector. Waymo, for example, offers complimentary robotaxi trips to 50,000 consumers in Los Angeles. Wayve utilizes artificial intelligence and machine learning to enhance car navigation and decision-making, while Amazon’s Zoox employs robotics to drive its robotaxis further, faster, and even at night in Las Vegas.

Considering the $62 billion market potential, positive legislative tailwinds, and the involvement of industry giants like Amazon, autonomous driving stocks present a solid investment opportunity throughout the year. However, it is advisable to focus on undervalued plays with the most potential for maximum returns.

Top Autonomous Driving Stocks:

1. Mobileye Global (MBLY): Spun out from Intel, Mobileye holds a 70% market share in the advanced driver assistance systems sector. Despite a recent decline in sales, analysts maintain a ‘strong buy’ consensus on the stock, projecting a target price of $38, indicating a potential upside of around 46%.

2. Baidu (BIDU): Baidu’s Apollo RT6 is a self-driving electric car designed for robotaxi services. BIDU is the first company in China to receive permission to operate fully driverless robotaxi services. With plans to expand its services to 100 cities by 2030, Baidu’s autonomous driving segment is expected to contribute significantly to its overall business. Analysts rate BIDU as a ‘strong buy’, forecasting a potential upside of 67%.

3. Luminar Technologies (LAZR): Luminar’s lidar technology is making its way into consumer vehicles, starting with a partnership with Volvo Cars. The company has also collaborated with Applied Intuition to enhance ADAS and autonomous driving research. While recent staff layoffs and a shift towards contract manufacturing have tempered analyst enthusiasm, LAZR stock still holds a potential upside of 236%.