When Tesla (NASDAQ:TSLA) announced its August 8 robotaxi event, enthusiasm for autonomous driving got a shot in the arm. Indeed, Tesla stock also received a much-needed jolt as it looked to reverse gears after a nasty drawdown.
Earlier this year, excitement and hope in full-self-driving (FSD) technology and the concept of robotaxis faded a bit. Apple (NASDAQ:AAPL) reportedly pulled the plug on its Apple Car (or Project Titan) program. However, Tesla’s August 8 event may very well bring to hype back. In any case, it will be very interesting to see if what Tesla unveils will help propel the robotaxi and autonomous driving trends back into the driver’s seat again.
Only time will tell what the big day will have in store for TSLA stock and self-driving plays as a whole. Regardless, I believe they’re worth watching (and perhaps buying) as they drive into August.
Tesla (TSLA)
It’s been an awful year for Tesla so far, with shares down 30% year-to-date. For now, not everybody is euphoric about Tesla. It has grappled with rough industry headwinds. Furthermore, considerable negative momentum weighing down its stock.
For the first quarter of 2024, deliveries were down 8.5% as electric vehicle (EV) demand took a breather. There doesn’t appear to be any signs of a swift reversal ahead for Tesla or the EV industry. However, investors could begin to be more forgiving of further weak quarterly results. They may hope that August 8 will unleash something truly game-changing for the robotaxi industry.
Also, the Robotaxi event will lay out a roadmap, perhaps a multi-year one, for the gradual release of its robotaxi. And, the degree of autonomy seems unlikely to be here yet. If Musk delivers more clarity and specifics on Tesla’s longer-term robotaxi plans, the firm may beckon longer-term investors to scoop up TSLA stock on weakness.
Baidu (BIDU)
Baidu (NASDAQ:BIDU) is a Chinese internet juggernaut that has not been going anywhere fast. The stock is still down over 67% from its February 2021 peak. And, seems to be sinking again after a brief rebound in the back half of 2022.
With its latest agreement to provide mapping data to Tesla to help aid its FSD tech in China, BIDU is a must-watch stock. In fact, the deal stands out as a potentially huge win for both companies as they seek to collaborate. Many may underestimate the potential for a Tesla-Baidu partnership.
Tesla aside, Baidu has been working on its own autonomous driving tech for many years. Leveraging its AI expertise with its Apollo self-driving program, Baidu is a standout way to play the future of the robotaxi and FSD scene.
At 14.3 times trailing price-to-earnings (P/E), Baidu stands out as a potentially glorious bargain for investors willing to venture into the hard-hit Chinese market. The company is innovating on many fronts, from generative AI to self-driving.
Alphabet (GOOG, GOOGL)
Robotaxi and FSD projects represent just a small piece of the pie for Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL). It seeks to defend its Google search platform from potential AI disruptors while also betting big on AI itself. With its large language model (LLM) of Google Gemini and its stake in private AI firm Anthropic, Alphabet is a top-two AI stock to own for the long run.
Self-driving capabilities and AI go hand-in-hand. Its Waymo division is testing the roads (without a driver) in certain areas. So, it certainly seems like the emerging robotaxi market is Alphabet’s for the taking. And yet, Waymo isn’t quite perfect yet. A notable February accident could set a nationwide rollout back by quite a bit. In any case, I do not doubt Waymo will improve by leaps and bounds over time.
As a top rival of Tesla’s robotaxi, it will be interesting to see if Alphabet has anything in store for Waymo.
On the date of publication, Joey Frenette owned shares of Alphabet (Class C) and Apple. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
