Does the idea of a car that drives itself excite you or scare you?
Probably both.
Taking a nap, watching a movie, or getting things done (like analyzing stocks!) while en route to your destination sounds pretty appealing. Not to mention not having to deal with other drivers.
But “trusting” a 4,000-pound vehicle to safely stop, start, turn, slow down, speed up, and react the millions of ways a human driver would is frightening.
In a recent AAA survey, two-thirds of Americans expressed fear about self-driving vehicles. Another 25% weren’t sure.
So just 9% of us are ready to turn the machines loose on their own.
That being the case, how about a 35,000-pound semi driving itself?
Get ready, because they are on the way… sooner than you might think.
And they are more than just cool. They are one way to correct supply chain problems that have been the go-to excuse for rising prices since the pandemic.
Because of COVID-19 complications and the ongoing Russian invasion of Ukraine, global supply chains slowed in 2021 and 2022, causing global shortages and raising consumer costs.
This year has already had its own set of challenges. Middle East conflicts impact goods moving through the Red Sea, the tragic collapse of the Francis Scott Key bridge created a bottleneck of goods going in and out of Baltimore’s port, and freight costs are volatile due to shipping disruptions in the Suez and Panama Canals.
According to Supply Chain Management Review, more than half of companies plan to increase supply chain budgets to help address these obstacles.
That includes autonomous trucks. Where humans have driving limits, both physically and legally, a driverless truck could technically be on the move transporting goods 24/7. No rest stops required.
In a test drive conducted in 2022, a self-driving semi made a delivery from Dallas to Atlanta. It drove nonstop, covered 6,300 miles, and took only five days. That same trip with a human driver takes twice as long.
Proponents of this technology not only promote its efficiency and productivity but also suggest that it would greatly improve highway safety. If the technology is advanced enough, as we all hope it would be, that makes sense. Based on some recent headlines, though, fully autonomous driving appears to have a ways to go.
There’s also federal and state-level red tape before these unmanned trucks hit the cross-country roads. While 12 states specifically allow driverless operations, 16 do not specify autonomous vehicles in their regulations and 10 states place limits within their borders.
But even if full self-driving trucks aren’t quite ready yet, the technology seems to have improved enough to work with a little human help – a human who can take over in an emergency.
Kodiak Robotics, a privately held company, says it will have a driverless fleet across the U.S. by 2027. Kodiak plans to start autonomous deliveries between Houston and Dallas this year.
Another company leading the way – Aurora Innovation (AUR) – says it will have fully autonomous trucks operating in Texas by the end of this year.
Very cool. Potentially transformative. And possibly very lucrative.
So naturally, I checked on the opportunity and ran AUR and a few other stocks through my Quantum Edge system.
Aurora Innovation (AUR)
Source: TradeSmith Finance and MAPsignals.com
Aurora Innovation was founded in 2017 and prides itself on bringing the benefits of self-driving technology “safely, quickly, and broadly.” In 2020, Aurora acquired Uber’s self-driving unit – Advanced Technologies Group (ATG) – and Uber Technologies (UBER) invested $400 million into the company.
Today, Aurora’s long-haul trucks make about 100 deliveries a week for FedEx, Uber Freight, and others, with plans to eventually operate thousands of trucks across the U.S.
That all sounds promising. But when we look at Aurora’s Quantum Score, it’s just not there yet.
The incredibly low fundamentals of 29.2 weigh this company down. The big problem is that Aurora continues to lose money. That’s common with startups, and it doesn’t mean the company is forever doomed as an investment. But it does inject massive uncertainty about if and when profits will arrive, and just how big they could be.
Big Money has also been inactive in AUR, with only four buy signals going all the way back to 2014. All four came at the end of 2021 when the company went public. There have been no signals since.
Aptiv (APTV)
Source: TradeSmith Finance and MAPsignals.com
Aptiv (APTV) is headquartered in Dublin and aims to develop safer, greener, and more connected vehicles. It grew out of a now-defunct American company – Delphi Automotive – that was formerly a part of General Motors.
The company describes itself as an autonomous leader, developing advanced technologies to make self-driving possible. Aptiv also partnered with Hyundai Motor Group and operates a commercial, autonomous ride-sharing service in Las Vegas.
Its Quantum Score of 56.9 is decent but below my optimal buy zone of 70 to 85. That’s mostly because of weak technicals that score 44.1. APTV is down more than 25% from its highs last July, and has slipped 8% so far this year.
But we see an interesting divergence happening here with the company’s impressive Fundamental Score of 75. That makes this stock one to watch, as strong fundamentals typically lift the stock – and the technicals – in the process.
APTV’s one-year sales growth of 14.6% and three-year growth of 15.4% are respectable, and I like its 14.7% profit margin. I also see that it carries 96.4% institutional ownership, and my system picked up two Big Money buy signals (green bars) just this month.
Source: MAPsignals.com
I wouldn’t buy APTV at the moment, but I wouldn’t write it off either.
Qualcomm (QCOM)
Source: TradeSmith Finance and MAPsignals.com
I’ve saved the best for last.
Qualcomm (QCOM) is a well-known company that creates semiconductors, software, and services related to wireless technology.
It has been long known for its wireless chips, but the company also has its own autonomous driving segment called Snapdragon Ride Platform that was launched in 2020. Snapdragon addresses complex advanced driver-assistance systems (ADAS) and automated driving applications.
Its Quantum Score is a buy at 81, powered by that Technical Score of 91.2. Shares are up 85% the past 12 months, including an 18% run since earnings two weeks ago. Not surprisingly, my system has picked up three Big Money buy signals in the last 30 days and seven in the last three months.
Source: MAPsignals.com
(Quantum Edge Pro members receive full access to my system’s Quantum Scores. You can learn more here.)
While its fundamentals are a little lower at 66.7, I’m still impressed with Qualcomm’s overall score.
It seems like true self-driving trucking companies like Aurora Innovations aren’t good investments yet, but there are opportunities in companies leading the way in the manufacturing, software, and parts needed for this autonomous technology.
Talk soon,
Jason Bodner
Editor, Jason Bodner’s Power Trends
Disclosure: On the date of publication, Jason Bodner held a position in Qualcomm (QCOM), mentioned in this article.
