Stocks to buy

How to Play the Next Big Thing: the Rise of Tesla’s Robotaxi

When a revolutionary new product launches, what’s the best way to invest in its success?

By buying that product-maker’s stock… right?

Maybe not. 

Just consider: ever since Apple (AAPL) launched the first iPhone in June 2007, Apple stock has taken off like a rocket ship. It has risen more than 6,000% in value since that time. But do you know which stock the iPhone propelled even higher? Broadcom (AVGO) – a company that has since become an important Apple supplier. Its stock is up more than 16,000% since the first iPhone’s launch.

Another great example is Tesla’s (TSLA) Model 3. Many consider it to be the most transformational electric vehicle (EV) – the car that really brought EVs to the mainstream. And, indeed, ever since its launch in July 2017, Tesla stock has absolutely soared, climbing about 1,500% higher. 

But to create such a world-changing new product, Tesla was using chips from another company, Nvidia (NVDA), to power the Model 3’s unique Autopilot technology. And guess what? Nvidia stock is up around 14,000% since that vehicle’s debut. 

This pattern is persistent. Let’s follow it even further, back to the launch of the first personal computer (PC), IBM’s (IBM) model 5150, which arrived in August 1981. Since 1983, IBM stock itself has done well, rising more than 800% on the back of continued PC growth. But that original IBM PC was powered by an x86-architecture Intel (INTC) 8088 processor. And since 1983, Intel stock has trounced IBM, rising nearly 4,000%. 

You get the point. Sometimes, the best way to play a revolutionary new product launch is not to buy the stock of the headline company making the product. 

Often, suppliers outperform

And that’s why I want to turn your attention to the next batch of potential superstar ‘supplier stocks.’ 

Robotaxi: The Transformational Launch Coming This Week

You see; in just a few short days, Elon Musk – Tesla CEO and the richest man in the world – is set to unveil a new product that some think could be as impactful as the iPhone, the Model 3, or the first PC. 

It’s called the Robotaxi. And it promises to shock the world. 

Reportedly, the vehicle will be a fully self-driving car, without any steering wheel or pedals. Early descriptions revealed it’s likely to comprise a two-seat interior with a large center console. Musk says it will also have the lowest cost per mile of any transportation option. 

And supposedly, it will be accompanied by its own ride-hailing app (like that of Uber) that will allow customers to fetch autonomous rides in the Robotaxi. 

Now, if that all sounds like science fiction, that’s because it was born of it. 

But that’s what Elon Musk could do this coming Thursday, when he reveals the Robotaxi. He could turn science fiction into reality. And that’s what’s so exciting about this upcoming debut. 

Revolutionary product launches of the past also turned science fiction into reality. 

And as we’ve outlined above, that’s when the magic happens. 

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