When it comes to autonomous (self-driving) vehicles, it's not a matter of if, but a matter of when these vehicles completely revolutionize the auto industry. And that "when" has already arrived for several companies doing live tests on real roads and in real traffic.
Before we give you one of the best tech stocks to buy now in this sector, here's a look at some of the biggest developments in the autonomous vehicle industry in the last two years...
- Uber began testing driverless cars in Pittsburgh early in 2016.
- Alphabet Inc. (Nasdaq: GOOGL) has fielded a fleet of autonomous cars that have collectively logged millions of miles in the last few years.
- Ford Motor Co. (NYSE: F) and BMW AG are working to produce driverless cars by 2021.
- General Motors Co. (NYSE: GM) has invested $500 million in ride-sharing startup Lyft, and the two are working on autonomous vehicles together.
- In April 2015, an Audi SQ5 SUV drove 3,500 miles across the country almost entirely "hands free."
Another tech titan is determined to grab its share of this burgeoning new industry. CEO Tim Cook says Apple Inc.'s (Nasdaq: AAPL) car project is "the mother of all artificial intelligence (AI) projects."
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Money Morning Director of Technology & Venture Capital Research Michael Robinson loves this trend, as well, and has been covering it for years. According to Robinson, this industry also sits in the right spot to take advantage of U.S. President Donald Trump's $1 trillion infrastructure improvement plan.
Here's why Robinson is so bullish on this sector and one of the best tech stocks to buy now to profit from autonomous vehicles for years to come...
One of the Best Tech Stocks to Buy Now: A Pioneer in Self-Driving Cars
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Robinson has been recommending auto supply and AI stock Delphi Automotive Plc. (NYSE: DLPH), which is up 17% this year.
According to Robinson, this is "the single best pick in the 'car-of-the-future' space."
He loves the stock because it's a great play for all the tech products that are going into cars now, and because it's a pioneer in the self-driving car field. It's a play on the cars of now, as well as the cars of the future.
Delphi needs to ensure that it controls the best tech, and over the past few years it has taken great steps to do so. Just look at some of these moves the company has made in recent quarters:
- Bought a minority stake in Israel-based Valens Semiconductor Ltd., which makes chips that can quickly transmit large volumes of data
- Taken a minority stake in Otonomo, another Israeli company, which has a platform that can track and process the data that vehicles produce
- Struck a strategic pact with Germany-based Rosenberger, which builds systems that enable automated vehicle systems to work better
Delphi is at the very heart of the most profound changes in the auto industry since the advent of the combustion engine.
The company is so excited about this mega-trend that it wants to focus the whole firm on advanced driver assistance systems (ADAS) and connected cars. More than 5,000 of the firm's engineers are solely focused on this emerging tech platform. And it's part of the reason why Delphi is spinning off its powertrain unit into a standalone firm.
ADAS first showed up on the flagship cars made by Mercedes-Benz, Lexus, and BMW. Now ADAS is moving down the line to lower-end models of those premium firms and also starting to appear in mass-market brands like Chevrolet and Honda.
Remember the Audi SQ5 SUV we mentioned above that left San Francisco to begin a 3,500-mile trip to New York City? While Audi provided the basic vehicle, it was Delphi that spent more than $1 million in specialized 3D sensors, cameras, software, laser-measuring devices, and engineering services to pull off this miracle.
And there was no driver. It was first "driverless" auto crossing of the United States.
This SUV was able to maneuver around bicyclists and pedestrians, navigate four-way intersections, and merge with highway traffic.
For Delphi, it was well worth the money. The lessons learned will help refine its tech and cement Delphi's status as the clear leader in the field.
But that voyage is now ancient history, and the company has not rested on its laurels.
Earlier this month, Delphi announced it will partner with Paris-based Transdev Group, the French government-controlled public transport service, to develop an automated on-demand shuttle service in Europe. The target date for getting these driverless vehicles into general use is less than two years away. And it eyes the North American market as well as Europe.
Think about that for a moment. Fully automated public transportation would be a game changer. The safety increases that occur when human error is removed from the equation would be priceless.
This is why Robinson sees Delphi stock climbing another 30% in the next one to two years. And more importantly, it gives us a ground-floor window from which we can watch the driverless vehicle mega-trend take shape. Right now, DLPH stock is up 28% in 2017, which is more than three times the returns of the Dow (8%) in the same time.
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