Image source: Getty Images
The once futuristic concept of robotics (self-driving taxis) is quickly becoming a reality. Already, these cars are on the roads in several US cities. Want to invest in this exciting technology area? Here are three S&P 500 stocks you should consider buying.
Tesla
When it comes to self-driving technology, Tesla's (NASDAQ:TSLA) leader. So naturally, it aims to be a major player in the robotics space.
Now at this point, we don't know much about Tesla's plans here. But that could change next month when the company holds its robotaxi event on October 10.
Elon Musk's CEO said this day will be extraordinary “important moment for Tesla” as the Model 3 was introduced years ago. So investors are very happy.
Thing is, Tesla robotaxis could still be years away. That's because, in the US, Tesla currently doesn't have approval for autonomous vehicle testing or driverless deployment.
An additional issue to consider with this stock is valuation. Currently, the P/E ratio is around 105. That is high. Given the high rating, this is not my favorite robotaxi game right now.
Alphabets
Another company leading the way in self-driving technology is Waymo, which is owned by Google's parent company. Alphabets (NASDAQ: GOOG). The main difference between Waymo and Tesla however, is that the former already has robotaxis on the road.
Indeed, it's been testing the technology for years now in cities like Phoenix, San Francisco, and Los Angeles (I'm willing to try one the next time I'm in California). And earlier this month, it announced that it is expanding its services to Austin and Atlanta. So it has a clear first advantage.
However that is not the only reason to be bullish here. Another stock valuation. Currently, Alphabet's P/E ratio is about 21.5, which is low for a technology company.
On the other hand, self-driving car technology is a small part of Alphabet's business. Most of the income comes from digital marketing (which can be a recurring business). So even if a company were to have success in the robotics space, there is no guarantee that the stock will do well.
Uber Technologies
And this brings me to my last stock, Uber (NYSE: UBER). I believe this is the best way to play robotaxi theme.
You see, Uber operates the largest rideshare platform in the world. Today, it has more than 150m users worldwide. Given its size and affordability, it has the perfect platform for any automotive company looking to enter the robotics space.
Already, Uber has a great partnership with Waymo. I think that in the future, it can have a relationship with many other companies (maybe even Tesla).
Uber is uniquely positioned to offer great value to private car players who want to leverage their technology at scale.
Uber CEO Dara Khosrowshahi
Of course, human drivers are likely to play a role in Uber for years to come. And this means that there may be other issues regarding regulations, pay, strikes, and so on.
I'm happy with the talent here though. As a result, I made the stock – which currently has a P/E ratio of about 30 – a large position in my portfolio.
Source link
