My Top Picks for the Self-Driving Car Era
Here are my top two best stock ideas for the self-driving car era. (Keep in mind that these stocks are my long-term ideas)
This stock might be my best pick in self-driving cars. NVIDIA is known for its high-quality chips in the gaming industry, but very few people are noticing their big push into self-driving cars. NVIDIA's Tegra processors are just one reason. Originally designed to enter the phone market, NVIDIA pulled away as competition like Qualcomm and others got too fierce. They then decided to enter the car market. It was an instant hit. Revenues generated in NVIDIA's automotive division increased by more than 45% in YOY growth. Even better, NVIDIA has an abundance of car-manufacturer partnerships. The most notable include Honda, BMW, and Volkswagen. Furthermore, NVIDIA recently (last week) announced that they were going to partner up with Baidu to develop a platform for self-driving cars. Pair this announcement with NVIDIA's already existing DRIVE PX platform for self-driving cars and others and you have yourself a great long-term investment (at least, that's what I think).
Although NVIDIA was my best pick, it's not a direct investment into self-driving cars. It has many other divisions, including their high-quality chips for PC gamers. However, if you are looking for a direct investment in self-driving cars, then look no further. MobilEye develops "collision avoidance" systems for self-driving cars. So, like in the picture, if the car goes near a person, it will recognize them and the car will stop. Unlike most self-driving car companies, MobilEye's technologies are already useful. MobilEye is already implemented into Tesla cars with autopilot features. Also, MobilEye recently entered into a partnership with Delphi, a car manufacturing company, to develop self-driving cars by 2019. The stock has increased more than 16% since the start of 2016 (forgot to mention this above, but NVIDIA has increased by 90% since the start of 2016). Although this year's gains are small (when compared to NVIDIA), I think MobilEye will be a ten-bagger in the future if self-driving cars take off. Keep in mind, though, potential ten-baggers and "pure-play" investments like MobilEye come with huge risk. The stock has an extremely high P/E of 145.56 and, if self-driving cars don't work out, then MobilEye's stock, which basically reacts to good or bad news about this industry, will plunge.
Please read my disclaimer before taking any financial action