Reasons for investing in the world of autonomous vehicles
Jun 07, 2019 09:23AM
By Jeff Herman
Equity Partner, Wagner Wealth Management
A world with autonomous cars seems almost unbelievable, but, in reality, self-driving cars are already making inroads into our everyday lives.
These driverless cars have the potential to transform how humans and goods are transported from place to place. If autonomous vehicles become the norm, everything from private car ownership to truck transportation to urban design planning will be challenged, even leaving the possibility for private ownership to become obsolete. Which is why investing in automotive companies and these new technologies may be the best move for your future.
However, if you are still skeptical, here is a little insight on what the future holds.
We must first understand what autonomous cars do and how they function. Driverless car technology is a combination of hardware and software that automates the task of getting to your destination safely with no human interference necessary. Intel CEO Brian Krzanich thinks of this kind of software as “data centers on wheels.”
The cars of the future will emit beams that communicate with sensors in the highway and other vehicles. Think about your car having an invisible buffer surrounding the vehicle, keeping the car in its proper lane and detecting possible objects that might be dangerous to passengers.
All these new advancements have come from a decades-long push to make automobiles safer for car buyers and to meet the needs of the consumer. We have already seen a trend toward semi-autonomous cars from major automakers, such as Ford and Lincoln, with the Ford Fusion and Lincoln’s MKZ sedan hitting the market. Both models have hardware installed that could easily be converted into an autonomous driving system.
While the automotive world is making key advancements, major technology companies have jumped on board to help make driverless cars become a reality, too. Intel’s rival, the NVIDIA Corporation, has already staked out a substantial position in the early market for these autonomous vehicle-processing systems. The company has created the Drive PX, a mobile, liquid-cooled supercomputer. In other words, the throttle, breaking, and steering systems are all controlled by onboard computers.
They are also in the process of creating advanced hardware, which combines advanced graphic processors and artificial intelligence to help automakers and tech companies come together to create the semi-autonomous vehicle.
Together, these technologies could potentially lead to completely driverless vehicles by 2021.
The NVIDIA Corporation isn’t the only company who has chosen to throw their hat into the ring to get autonomous cars on the road. Another company is Alphabet (née Google), the parent company of Waymo, a part of Google’s autonomous vehicle division.
Waymo is one of the few companies in the lead when it comes to testing out driverless cars. The technology development company currently has a ride-hailing service in Phoenix, Ariz., where people are encouraged to ride in a self-driving minivan for short trips around the city.
With all this new technology being created, this means plenty of stocks for investors to choose from.
As always, it’s smart to not only think about the large companies involved, but also, the subsidiary companies that can spring off this industry. For example, companies involved in cyber security will be working on ways to make money off protecting driverless vehicles.
Self-driving vehicles also will play a role in e-commerce. After all, who needs to hire someone to pick up groceries when you can program your car to go to the store for you?
The options seem endless.
Jeff Herman, a 30-year veteran of the financial services industry, is an Equity Partner with Wagner Wealth Management, LLC. He can be reached by email at Jeff@wwmadvisors.com. Securities offered through Triad Advisors, LLC Member FINRA/SIPC. Advisory Services provided through Wealth Management Advisors, LLC, A Registered Investment Advisor. Wealth Management Advisors, LLC is not affiliated with Triad Advisors, LLC. Wealth Management Advisors, LLC and Wagner Wealth Management are not affiliated with Triad Advisors.