Waymo Already Has 170M Miles of Rider-Only Travel

Self-driving vehicles are automobiles, trucks, flying vehicles, such as drones, and so on that are not guided or driven by a human, but by an AI instead. This requires many different technologies, of course:

• Self-driving vehicles require a wide range of sensors to know what’s happening around them, to know where they are moving at what speed, and so on. Optical cameras and LiDAR sensors (like radar but using laser emissions) are the most important ones, as those give the cleanest “picture” for the AI about the vehicle’s surroundings. 
• This sensor data then needs to be processed quickly, which is why computing power, fast memory, etc. are needed as well.
• On the software side, a well-trained AI is needed that is able to see patterns, sense potential risks, that is able to identify street signs, and so on.
• All of this has to be extremely secure, as errors mean a high risk for the vehicle, its passengers, and everyone near the vehicle. Sensors, computing units, etc. thus have to be redundant to prevent fatal errors if something breaks or goes wrong.

Self-driving is still in its infancy, but the industry is moving quickly. More and more companies roll out trials, tests, etc., with some of the leading ones being Tesla (NASDAQ: TSLA) with its Full Self Driving (“FSD”) kit, Amazon (NASDAQ: AMZN) with its Zoox ride service, and Alphabet (NASDAQ: GOOG), which is leading the way with its Waymo robo-taxi brand. In China, major players include Apollo Go, which belongs to Baidu (NASDAQ: BIDU) and Pony AI.

Once the tech has evolved to a point where self-driving vehicles can be rolled out on a broad scale, which also requires the capacity to manufacture large numbers of such vehicles, this technology will change many things.

Users of self-driving vehicles won’t have to focus on the road while driving — sleeping, working, watching movies, and so on are some of the possibilities. There will be less “lost time” when commuting or travelling, as consumers can use the time spent in vehicles however they want.

In industries, such as trucking and farming, self-driving vehicle tech will bring down costs substantially. Fewer human drivers will be needed, and uptime will be higher, which could make products and services cheaper for both consumers and businesses. This will also help against skilled worker shortages, like we have seen with truck drivers in recent years.

Cashing in on Self-Driving Vehicles

Companies that work on self-driving vehicles will be beneficiaries of this trend, of course — at least under the condition that they succeed. It’s not guaranteed that every company currently working on self-driving vehicle tech will be able to develop systems that are safe enough to get approved on a broad scale.

Due to their vast resources, TSLA, AMZN, and GOOG look like they’re among the best-positioned companies in this group.

Since self-driving vehicles will require all kinds of tech bought from suppliers, these are major beneficiaries as well. NVIDIA (NASDAQ: NVDA) will benefit from this trend, as algorithms are trained on its chips and since vehicles themselves will have more computing power. Qualcomm (NASDAQ: QCOM) will benefit via its automobile chips business, when vehicles become more and more techy and companies producing and selling sensors will benefit as well, such as Bosch.

Companies that are active in the taxi industry are noteworthy potential winners too: UBER and Lyft (NASDAQ: LYFT), for example, have huge plans when it comes to deploying robo-taxis to bring down costs, which should result in higher profits.

Investors that are interested in broader exposure to the world of tech and Artificial Intelligence should take a look at our top picks.