Auto technological innovation stocks surely have Wall Street’s attention this calendar year. Younger buyers surface to see following-generation vehicle know-how as a significant extensive-phrase expense possibility.
Autonomous automobile technologies is a single of the most important financial investment themes in the automobile market place these times, and Mizuho analyst Vijay Rakesh lately did a deep dive on Lidar tech shares.
What Is Lidar? Lidar is shorthand for light-weight detection and ranging, and it is a way for self-driving cars and other robots to use lasers to detect objects in the world around them and get rapid, accurate steps of spatial locations based on how very long it will take the laser beams to replicate back again to the sensors.
Rakesh estimates the global Lidar market was value about $1.5 billion in 2019, but will reach about $3.6 billion by 2025 — or about a 15% compound annual advancement rate.
“The automotive section is predicted to improve appreciably quicker from <$200M in 2019 to ~$1.7B by 2025E, a ~59% CAGR, as Autos could account for ~50% of the LiDAR market by 2025E with significant ramps in ADAS/autonomous driving and improving LIDAR technologies,” the analyst said.
The AV auto market is still in the early stages, but some auto companies have already made tremendous strides in advancing their technologies. Auto companies have only made it to the second of the five levels of vehicles autonomy.
Navigant Research ranks Alphabet, Inc. (NASDAQ: GOOG) (NASDAQ: GOOGL) subsidiary Waymo as the market leader in AV technology, followed by legacy automakers Ford Motor Company (NYSE: F) and General Motors Company (NYSE: GM).
How To Play It: Investors have a tremendous opportunity investing in the tech companies behind the Lidar systems themselves, Rakesh said.
Mizuho names the following six automotive advanced driver assistance system manufacturers as “well-positioned” to benefit from the auto autonomy trend:
- Veoneer Inc (NYSE: VNE)
- ON Semiconductor Corp (NASDAQ: ON)
- NXP Semiconductors NV (NASDAQ: NXPI)
- Autoliv Inc. (NYSE: ALV)
- Texas Instruments Incorporated (NASDAQ: TXN)
- NVIDIA Corporation (NASDAQ: NVDA)
Benzinga’s Take: Level 5 autonomy may take longer than many auto investors anticipate due to safety concerns on the part of regulators.
The auto industry is only a small part of the future of automation, so tech companies exposed to the theme may be lower-risk investments than AV pure-play stocks.
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Photo courtesy of Nvidia.
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