The growing need for autonomous transportation solutions has become increasingly evident in recent years. As urban populations mushroom and global supply chains struggle to keep up with rising demand, autonomously driving vehicles–from private automobiles to public buses and industrial rail systems–are increasingly being seen as a safe, reliable, and cost-effective option for optimizing transportation infrastructure.
Over the past decades, the rapid development of autonomously-driving vehicles and computer vision technologies coincides with a renewed focus on public infrastructure investment in the USA, Europe, APAC, and beyond. For instance, the White House’s 2021 Bipartisan Infrastructure Law directs some $50bn towards revamping American roads and rail, specifically identifying creating more resilient and technologically advanced infrastructure as a core objective.
As covered by McKinsey, the European Union is also observing a surge in passenger and freight traffic on its extensive railway network as member states increasingly incentivize public transportation over less sustainable options such as private cars and passenger airlines. Meanwhile, in APAC, transport-related M&A deal value hit new highs in 2022 as population growth and fast-paced economic development underscore the need for more efficient and safe transportation infrastructure.
The convergence of these technological, political, and economic trends is creating an increasingly optimistic outlook regarding the prospects of autonomous transportation solution providers over a long-term horizon. Here are three disruptive stocks aggressively positioned to leverage increased capital inflows, consumer demand, and public sector support for autonomous vehicle and transportation solutions.
1. Mobileye
Mobileye Global Inc (NASDAQ:MBLY) is a blue chip player in the autonomous vehicles market that Intel acquired (NASDAQ:INTC) in 2017 and recently went public again in October 2022 in an IPO that raised $861m. MBLY’s core technologies revolve around advanced driver assistance systems (ADSs), which incorporate cutting-edge computer vision and AI technology to make transportation safer, smarter, and more efficient.
Notwithstanding a bearish macroeconomic climate, Mobileye's share price has increased >50% since its listing on Oct. 26. The company’s recently announced Q3 ‘22 financials likewise defied expectations, with 38% revenue growth for a total of $450m compared to a forecast $457M. Given its enterprise value of ±$28bn, strong earnings, and access to Intel’s shareholder base and computing expertise, Mobileye’s first-mover advantage in the autonomous transportation solution market is currently in the spotlight.
2. Luminar Technologies
Luminar Technologies (NASDAQ:LAZR) was founded in 2012, emerged from stealth mode in 2017 on the heels of a $36M series A funding round, and went public in December 2020 via SPAC. Luminar focuses on developing vision-based lidar technologies and software for passenger cars and commercial trucks in North America, Europe, APAC, and MENA. It has secured high-profile deals with automatic manufacturers like Volvo and Nissan (OTC:NSANY) and has even inked a 2020 deal with Mobileye for the provision of lidar tech to its fleet of autonomous vehicles.
Luminar share price has underperformed in 2022 and is down by 56% YTD compared to S&P 500’s 17% losses. Its Q3 ‘22 {{ l-1121160||financials}} paint a mixed picture; though revenue ($12.8m) is up 60% relative to Q3 ‘21 net losses ($117.6m) widened by 129% from Q3 ‘21 and EPS of the analysts’ consensus by 26. Notwithstanding a challenging year for LAZR shareholders, the company’s robust intellectual property portfolio and deal flow with leading automotive manufacturers suggest significant multi-year upside.