The concept of autonomous vehicles being accessible on an everyday basis is still a few years away, but thanks to companies such as Alphabet (NASDAQ: GOOG), Tesla (NASDAQ: TSLA) and NVIDIA CORP (NVDA), investors can access the theme right here, right now.
Better yet, they can tap the autonomous vehicle space with ETFs, such as the ARK Autonomous Technology & Robotics ETF (NYSEARCA: ARKQ). Famed for its large weight to Tesla, currently 11.16%, ARKQ is one the top ETF avenues into the autonomous vehicle theme and what a theme it could be.
“We estimate autonomous ride-hailing will be worth $9T, or more than today’s energy sector, in the next ten years,” said ARK Invest analyst Tasha Keeney in a Tuesday tweet.
ARKQ captures the converging industrial and technology sectors, capitalizing from autonomous vehicles, robotics, 3D printing, and energy storage technologies. That wide mandate helps lever the ARK fund to much more than just self-driving cars, an important trait at a time of rapid robotics advancements. Still, it’s hard to ignore the autonomous ride-hailing opportunity set.
“Even though autonomous taxis will come later than originally promised, the market should still be measured in the trillions. After pushing our adoption curve back a year, ARK estimates the NPV of 10 year cashflows could be worth $1-2 trillion today,” notes Keeney.
There are also some speculative, emphasis on that word, forecasts regarding a possible though far from confirmed combination between Google’s Waymo and Tesla.
“The price paid, according to the speculation, would be $1,500 a share, or $270 billion. And the value ultimately realized by Google could be $1.5 trillion,” reports Al Root for Barron’s. “That’s more than 10 times higher than today’s valuation and, in theory, makes Tesla the most valuable publicly traded company in America.”
Investors are always on the lookout for long-term growth opportunities, but now more than ever, it seems prescient to look beyond the immediate noise of the socioeconomic and political headlines and find investment opportunities for the long-haul. Emerging technologies may offer that growth, according to some experts.
“And who captures this value? Autonomous tech owners likely will control the majority of the economics,” notes Keeney. “Today’s ride-hailing platforms don’t seem to have autonomous tech that is market-ready. Best case could be to partner, in which case their 20-30% cuts could shrink to <5%.”
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.