The Top 3 Stocks Shaping the Future of Autonomous Driving

Stocks to buy

The technological advances of this new era, such as artificial intelligence and machine learning, open the way to new tools such as Autonomous Driving. They are no longer things of a distant future but are already part of our present and companies are working and developing their potential to apply it to their business models. Meet these autonomous driving stocks that are implementing this technology.

Lyft (LYFT)

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Lyft (NASDAQ:LYFT), a leading ridesharing company, posted strong Q3 2023 results, with a 15% year-over-year increase in gross bookings to $3.554 billion and a 10% year-over-year growth in revenue to $1.158 billion.

Surprisingly, the company narrowed its net loss to US$12.1 million. Operational highlights included 187 million trips, up 20% year-on-year, and 22.4 million active users, up 10% year-on-year.

Innovative features such as Women+ Connect and the Back to School initiative contributed to this success, while Lyft Media expanded its advertising reach.

Looking ahead to Q4 2023, they forecast gross bookings of $3.6 billion to $3.7 billion, with adjusted EBITDA of $50 million to $60 million and a margin of 1.4% to 1.6%.

In pursuit of autonomous driving, Lyft partnered with Motional, leading to the launch of Motional’s IONIQ 5 electric robotaxi on Lyft’s Las Vegas network. This marked an important step towards a fully driverless service, reinforcing the company’s focus on innovation.

Lyft CEO and co-founder Logan Green expressed his enthusiasm for making electric, autonomous, and shared transportation a reality. The partnership with Motional, launched in 2018, has not only introduced more than 100,000 Lyft passengers to autonomous technology but has also received overwhelmingly positive reviews.

The partnership aims to provide a seamless, familiar, and personalized experience, with app-controlled features and a dedicated Lyft AV app in the car.

Tesla (TSLA)

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Tesla (NASDAQ:TSLA), leads the electric vehicle and autonomous driving technology industry with its innovative approach and commitment to efficiency. The company has gained recognition for the quality of its electric cars and its constant pursuit of technological innovation.

In the third quarter of 2023, Tesla reported solid financial results, highlighting an operating margin of 7.6%. With substantial operating and net income, the company remains focused on reducing costs per vehicle, generating free cash flow, and continuing investments in artificial intelligence and other growth projects. This makes it one of those autonomous driving stocks to consider.

Tesla’s investment strategy stands out in a high-interest rate environment, prioritizing research and development (R&D) and capital expenditures for future growth, while still maintaining positive cash flow.

In addition to its success in vehicle manufacturing, Tesla has expanded its presence in artificial intelligence, especially with its Optimus Robot project. The company has doubled its computational capacity for artificial intelligence training, underscoring its commitment to the technological forefront.

In the field of autonomous driving, Tesla has revolutionized with FSD 12, which uses a “neural network planner” approach mimicking human learning. Elon Musk, in endorsing this approach, has highlighted its potential to transform autonomous vehicles and make a quantum leap in overall artificial intelligence.

Aptiv (APTV)

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Aptiv PLC (NYSE:APTV) is one of the big players in autonomous driving technology, and it’s doing great financially.

In the third quarter, it brought in $5.1 billion, an 11% increase in revenue. Even accounting for foreign exchange, the growth was 7%.

Their net income for the quarter? A whopping $1.629 billion, at $5.76 per share. And if we exclude special items, the figure is still $1.30 per share. They also showed their financial muscles with a cash flow of $746 million.

If we extend the perspective to the full year, the figures are even more incredible. Revenues were up 18% to $15.1 billion. Adjusted for everything, that’s a solid 16% growth.

But here’s the exciting part, Aptiv isn’t sitting idly by, it’s diving into the future. In June 2022, it invested $39 million in StradVision Inc., a South Korean autonomous driving startup.

This move gave them a 15% stake and made them StradVision’s second-largest shareholder.

StradVision is dedicated to AI-based vision processing for cars, and its software, SVNet, can detect everything from other cars to pedestrians, even in adverse weather conditions. All in all, it’s one of those autonomous driving stocks for investors to pay close attention to.

As of this writing, Gabriel Osorio-Mazzilli did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Gabriel Osorio is a former Goldman Sachs and Citigroup employee. He possesses discipline in bottom-up value investing and volatility-based long/short equities trading.

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