Development in the autonomous vehicle (AV) space has seen significant progress in the past few years. Reduced fuel consumption, lower CO2 emissions, and congestion minimization are the top benefits driving growing market interest  in autonomous vehicles. An industry report, titled Autonomous Vehicle Outlook, by the Allied Market Research, forecasts that  the global autonomous vehicle market will hit $556.7 billion by 2026 at an annual growth of 39.4% from 2019.

In the next few years, a shift from ownership to mobility-as-a-service (MaaS) will  also represent an important force propelling  self-driving vehicles. Also, an expansion of connected infrastructure and conducive government regulations are expected to go a long way in attracting more players in the AV market.

Among the latest developments in this space, Apple Inc. (AAPL) is planning to build a self-driving passenger car with its own battery technology, scheduled for launch  in 2024. Experts predict the coronavirus pandemic will accelerate the demand for driverless vehicles.

Thus, we think (GOOGL), Ford Motor Company (F), and Baidu, Inc.’s (BIDU) self-driving vehicle projects are strategically positioned to benefit their stocks immensely.

Alphabet Inc. – (GOOGL)

Waymo, GOOGL’s self-driving car project, began its journey in January 2009 and is one of the pioneers of  Level 5 fully Autonomous Vehicles.  In October 2020, Waymo stated that it has driven  more than 20 million miles on public roads to perfect its driverless technology. In March, the unit raised $2.25 billion in an external fundraising effort.

Waymo features under the “Other Bets” segment of GOOGL, alongside the latter’s life-science research unit, Verily. During the third quarter ended September 30, 2020, this segment garnered revenue of  $178 million , up 14.8% from the prior year period.

This fall, Waymo launched a fully driverless ride-hailing service for  the east side of metro Phoenix in Arizona. Initially, the service was only available to premium Waymo One members. However, it is now available to everyone in Chandler, southeast Tempe, and southwest Mesa through the Waymo’s app.

In October, Waymo also announced a collaboration with German automaker Daimler to develop self-driving semi-trucks and other large commercial vehicles with a carrying capacity of more than 33,000 lbs. Besides this,, Waymo has  partnerships with Nissan-Renault, Jaguar Land Rover, Volvo and  Fiat Chrysler.

On a year-to-date basis, GOOGL has climbed 29.5% to end yesterday’s session at 1773.96. Over the past six months, the stock has jumped 21%. Analysts expect GOOGL’s revenue for the fourth quarter to be $53.1 billion, representing  a 15.2% increase year-over-year.

How does GOOGL stack up for the POWR Ratings?

A for Trade Grade

A for Buy & Hold Grade

A for Industry Rank

A for Overall POWR Rating.

The stock is currently ranked #2 of 61 stocks in the Internet Industry.

Ford Motor Company (F)

F, the world’s leading automobile company, announced its plans to launch its self-driving commercial business in the United States by 2022. This project will feature vehicles based on the Ford Escape Hybrid crossover, including fleets of self-driving robotaxis and autonomous delivery pods. The company has partnered with Argo AI for its fourth-generation self-driving test vehicles. Argo AI is a self-driving start-up that is  backed by F and German vehicle maker  Volkswagen.

Earlier this month, F conducted a pilot project with Argo AI for charitable food delivery in Miami-Dade County. Back in 2018, Ford committed to invest $4 billion in its AV efforts through 2023. This included an investment in Argo AI worth $1 billion. F’s self-driving unit will be called as Autonomous Vehicles LLC, which will include the company’s self-driving systems integration, autonomous vehicle research, and advanced engineering as well as AV transportation-as-a-service network development

F ended yesterday’s trading session at $8.89, representing a  4.7% loss year-to-date. The stock has climbed 48.9% over the past six months. The Street estimates revenue for the quarter-ending March 31, 2021 to be $35.7 billion, representing  a 13.9% increase year-over-year.

F’s POWR Ratings reflect this promising outlook. It has an overall rating of “Strong Buy” with an “A” for Trade Grade, Buy & Hold Grade, and Industry Rank. It is ranked #5 of 34 stocks in the Auto & Vehicle Manufacturers industry.

Baidu, Inc. (BIDU)

BIDU is one of the largest AI and Internet companies in the globe. This Chinese company entered the autonomous vehicle industry in 2013 through the Baidu research institute. In 2017, it launched its driverless-vehicle project, Apollo, or the Apolong bus. This autonomous vehicle is being developed in association with a consortium of more than 40 companies and Kinglong.

On December 21st, Baidu Apollo received five Level 4 autonomous driving testing licenses from the Nanjing municipal government. Under these licenses , BIDU, in co-operation with Nanjing and Qinhuai district, will develop autonomous driving technologies, intelligent vehicle-infrastructure development, and smart auto-related connectivity.

In 2019, BIDU collaborated with Chinese automobile company FAW Group to develop the country’s first large scale robotaxi, Hongqi EV. It received 5 autonomous road test licenses in Beijing in 2019.

BIDU has surged 51.1% year-to-date to end yesterday’s trading session at $193.08. Over the past six months, the stock has rallied 57.4%. The consensus revenue estimate for the fourth quarter ending December 31, 2020 is $4.6 billion, representing an 11.3% year-over-year rise.

It is no surprise then that BIDU is rated a “Strong Buy” with an “A” for Trade Grade, Buy & Hold Grade, Peer Grade, and Industry Rank. It is currently ranked #1 of 115 stocks in the China Industry.

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GOOGL shares were trading at $1,758.34 per share on Tuesday afternoon, down $15.62 (-0.88%). Year-to-date, GOOGL has gained 31.28%, versus a 17.78% rise in the benchmark S&P 500 index during the same period.

About the Author: Namrata Sen Chanda

Namrata is an accomplished financial journalist, with nearly a decade of experience. She specializes in interpreting news releases and framing investment strategies, and has worked with some of the leading companies in real estate, banking, insurance, mutual funds, financial research, fintech, and investment education. More...

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