Hedge Funds says Uber Tech (UBER) the best among autonomous driving stocks

Humans have often imagined flying in the clouds. Even if it is happening, it is the machines that have gone for the obvious and now, driverless cars are filling up the blanks. The complications at the workplace and in general life have left people exhausted and in search of viable means to commute, if not on the clouds, then on the very earth they tread.

Self driven vehicles are the new future

Self-driving cars are fast becoming a reality for most of the people who wish to unburden and ADAS (advanced driver-assist systems) are here to just do that. These wonder vehicles come with partial self-driving systems and thus, heralding a new age of total independence from driving manually. This has happened due to the continuous innovation preceded by novel ideas before the final product hit the vehicle market.

About 2000 robotaxis have been introduced on the roads by the leading players already in the market. The honing part is still undergoing for the further development of these vehicles, with data gathering, and finetuning the AI systems fitted therein. Ensuring overall safety and mobility-as-a-service for the customers is the USP of the companies in the race. In the US and China, driverless services are spreading their reach across the regions, paving the way for the advanced robotaxi market.

Internet is helping in this too, through a single tap procedure to call a driverless car, one being able to relax without unnecessary traffic hassles. No doubt, investments worth billions have been made in the sector, making consumer comfort in driverless cars a reality. And when revenue generation is the concern, the added features are going to compel the consumers to go for extra, a 2021 McKinsey survey says. While vehicles with level 4 features are going to start in 2026, the firm adds that it will come with autonomous parking followed by highway driving afterward.

The new technology from Uber saves cost on fuel and repairs

Nowadays, vehicles are fitted with level 2 autonomy with wide usage. According to the firm, vehicles are ranked from 0-5 based on their features, either from preceding technologies utilized in them or with the added features honing up their capabilities. The autonomous models adopted in futuristic vehicles will pave the way for accident-free commuting, thus impacting innumerable industries connected with it. The introduction of advanced driver technology will therefore translate into lesser demand for roadside assistance and vehicle repairs.

A competitive business area will thus emerge in these sectors as this technology comes forth. Apart from that, high insurance premiums coming with level 2 capabilities vehicles driven manually, will also be done away with. Other insurance modules suited for the consumers availing these services in the future, will come up. McKinsey states that the ADAS and AD market for passenger cars has the potential to generate around $300 billion to $400 billion by the year 2035.

McKinsey isn’t the only optimistic organization, with others following suit. IDTechEx another surveyor, posits that the ADAS going towards a great growth graph, with surveys showing that the sales might reach $174 billion by 2045. This according to the survey, represents a compound annual growth rate (CAGR) of 37% starting in 2025.

Under US law, the National Highway Traffic Safety Administration (NHTSA) permits the deployment of about 2,500 self-driving vehicles with exemptions on a yearly basis. Meanwhile, a leading US business daily says that President-elect Donald Trump might bring a federal framework for self-driving vehicles within the Transportation Department. Yet, for establishing comprehensive guidelines for the adoption of autonomous vehicles, congressional action is required.

This is what is echoed by Grayson Brulte, founder of The Road to Autonomy, a data and analysis firm specializing in self-driving technology. And he says, “The companies want clarity on vehicles with no pedals and no steering wheel. There could be a fight over this, but if a federal framework is implemented, it could usher in the autonomy economy.”

A definite beneficiary will be Elon Musk who is considered an influential person in the would-be President’s inner circle. Musk has already made his plans clear as far as both EV’s and driverless cars are concerned. With the new regulations concerning the deployment of these vehicles, streamlining the federal approval for these is what he advocated in his company’s recent quarterly earnings call. He intends to do this by using his influence within the inner circle, including thus, the AI system and self-driving technology on which he stakes his future.

Uber going to turn the tables with technology

Big news from Downtown Dallas: Avride’s delivery robots have officially hit the streets! 🚀 Now delivering meals from your favorite restaurants via Uber Eats. Learn more: https://t.co/Jlq0cPZsuX

— Avride (@Avrideai) December 10, 2024

Uber is all set to receive the futuristic technology as a part of its growth strategy. This includes the recent announcement of Uber’s multi-year partnership with Avride to integrate its delivery robots and autonomous vehicles into Uber and Uber Eats operations. The urban mobility scenario has, thus, undergone a sea change with Uber’s arrival in the market, as it comes with innovative, convenient, and cost-effective solutions to its large customer base.

And while we suggest UBER to be one of our best autonomous driving stocks to buy according to hedge funds, here are the reasons why. The financial results for Q3 2024 show a revenue hike of 20% every year, multiplying to $11.2 billion. Gross bookings rose from 16% to $41 billion apart from a 17% increase in trips of 2.9 billion during the quarter averaging 31 million trips daily.  

However, Insurance costs include a lower percentage of overall bookings for the company, with a projection of a single-digit growth rate per rise. A rise in U.S. mobility EBITDA for 2025 is expected meanwhile, despite fare increases slowing to 0-6%. There are stock fund options in the market apart from Uber to choose from, despite a promising growth pattern of the company, holding better prospects of higher returns within a short period.