This Stock’s Earnings Could Double in Just 2.5 Years

The rollout of the true driverless car is only a few years away, and companies who don’t want to miss out are pouring billions into the space.

And now, that includes retailers who are climbing aboard to get a leg up on the competition.

Walmart Inc. (WMT) recently said it plans to begin testing autonomous vehicle deliveries in Austin, TX, Miami, and Washington, DC.

The nation’s largest store chain is doing so in partnership with Ford Motor Co. (F) and Argo AI, a self-driving tech startup.

And the news comes on the heels of an announcement from Waymo, the Google-backed autonomous car firm, saying it plans to add its driverless ride-hailing service in San Francisco, its second market after Phoenix.

With all of this growing interest and the money that comes with it, it’s no wonder Allied Market Research says the field will grow 39.4% a year through 2026 when it will be worth $556 Billion.

And I’ve identified a key supply firm making the entire sector possible. This is why it’s not surprising to me that many analysts have earnings doubling from 2020 to 2022 and share price targets over 50% higher than its current price.

In fact, I think we could go even higher than that, and I’ll explain why…

Automated Delivery

The online journal AI Startups recently listed 38 autonomous vehicle startups around the world. The top eight are based in the US and have raised a combined $21.4 billion.

It’s not totally clear exactly how much money is flowing into this space, but that’s a powerful start already.

And several of those new projects, like Walmart’s, are focused on automating deliveries.

The business case here is clear. Online shopping has taken the country and the world by storm in large part because it’s so convenient.

Shoppers want their purchases delivered just as conveniently. That means next-day or even same-day delivery.

That’s why Walmart is moving ahead with driverless deliveries with the startup Argo AI. This driverless technology company is no lightweight. It’s backed by Ford and Volkswagen AG (VWAGY), two of the largest carmakers in the world.

The idea is to have Walmart workers at local warehouses and stores load deliveries into an Argo-controlled vehicle, which will then drive itself to its destinations. This promises to make deliveries faster, cheaper, and more convenient.

A Self-Driving Stock

The supply firm I have in mind, Nvidia Corp. (NVDA), is bringing even more people into the field.

According to the Silicon Valley Business Journal, they have nearly twice as many employees working on autonomous vehicles as Waymo – 2,350 to 1,200.

Now, Nvidia is a great chip firm whose advanced products are moving the space rapidly forward. For example, the Nvidia DRIVE platform is a supercomputer-on-a-chip purpose-made for processing signals from car sensors, cameras, and radar.

The chip’s built-in AI then analyzes these signals to determine where the vehicle is in relation to its surroundings, and the best and safest route to get to its destination while avoiding obstacles.

Fully Integrated Driving

Nvidia’s DRIVE chips also integrate the conveniences of modern driving directly into the self-driving AI. I’m talking voice control, driver-assist, heads-up displays, crash alerts, GPS functionality, and monitoring drivers for whether they’re falling asleep.

The latest DRIVE Orin chip can even use all its signals to recreate a 3D model of what’s outside the car to its passengers, showing that it’s aware of any dangers. This will be important to building trust with passengers as cars become more and more autonomous.

Of course, safety in car chips is even more important. That’s why each generation of Nvidia’s DRIVE platform has gone through the most strenuous testing. In the latest DRIVE Orin configuration, every application on the system can be updated without requiring the system itself to reboot.

That’s a crucial safety feature. As you can imagine, rebooting a car while it’s driving itself would be a bad idea.

Even better, now is a good time to get in on Nvidia’s stock. It had a great catalyst back in June when the stock split 4 to 1. Nvidia also smashed earnings in the June quarter, reporting a 95% earnings increase.

I’m forecasting a conservative annual growth of 30% for the company now. That means earnings could double in just 2.5 years.

With a stock like this, you can cruise a lot faster on the road to wealth that is high tech.

Cheers and good investing,

— Michael A. Robinson

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Source: Strategic Tech Investor