2 Ways to Benefit From Self-Driving CarsNVDA) and NXP Semiconductors (NXPI) are the two companies which will definitely make profit from the self-driving cars concept, as they are spending a lot of resources on the future of self-driving cars.
In the most recent quarter, NVIDIA’s automotive sales surpassed $100 million in a lone quarter for the first time.
In 2015, NVIDIA publicized the second generation of its autonomous car development platform titled as “NVIDIA DRIVE PX 2”. The package is comprised of efficient Tegra processors with software and connector hardware that permits it to understand and respond to the car’s environment. NVIDIA has taken a courageous step to move further than in-car information and entertainment systems, which generates a major portion of the shares of the company’s automotive sales so far. I have been extremely bullish on NVIDIA and have recommended buying the stock several times in the last few months.
However, I think the self-driving car market is big enough to accommodate several companies, which is why I am also bullish on NXP Semiconductors.
NXP Semiconductors paid $11.8 billion to unite with its rival Freescale. That deal joins two automotive chips leaders together, turning them into a real giant. NXP Semiconductors and Freescale together account for approximately 14.2 percent market share in the $27 billion worldwide market for automotive chips, whereas no other supplier surpasses the mark of 10.5 percent.
If NVIDIA is a leader in infotainment systems, then Freescale-subsidized NXP takes a different tactic on the self-driving car market. NXP Semiconductors leads in security systems, environment sensors, and in-car communications. Each and every time there is data to be managed, NXPI Semiconductors is most likely present in that area. Ranging from engine starters and car locks to radar sensors and powertrains, NXP Semiconductors is present, and will likely be a huge part of the self-driving car market.
The self-driving car market will grow exponentially in the next few years, and investors looking to benefit from it have two great choices in front of them. Both NVIDIA and NXP Semiconductors have a great presence in the self-driving car market and dominate different areas of the market. Both the companies can co-exist in the self-driving car market and should benefit from its growth in the long-run.
Published on May 18, 2016By Prudent Investor