The Consumer Electronics Show in Las Vegas dominated the headlines over the weekend. CES has always been a platform to showcase the most innovative and cutting edge technologies, though this year there seemed to be a theme to the companies that stole the show: autonomous driving. Several companies basked in the limelight, including Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM), which both proved that they are more than traditional automobile companies, and NVIDIA Corporation (NASDAQ:NVDA), which is breaking into the autonomous driving market with a boom. Notably absent from the conference was Tesla Motors Inc (NASDAQ:TSLA); are these companies giving the current market leader a run for its money?
Ford Motor Company
Going into CES, the rumor mill was churning that Ford had partnered with Google to create autonomous cars. Mark Fields, Ford CEO, quickly clarified that the company will be partnering with several companies and universities to create a self-driving car. There was no direct mention of Google as a partner while Fields emphasized that Ford has been working on autonomous driving technology already for a decade.
Ultimately, Ford is poised to reinvent itself as a technology company. The company plans to have an autonomous driving test fleet of 30 vehicles by the middle of this year, which it claims to be the largest self-driving testing fleet available. At CES, Ford CTO Raj Nair explained that tech companies are underestimating the power and expertise of automakers. Simply put, technology companies alone do not have the resources to produce a vehicle, and this is where automobile market leaders come into play.
Analyst Joseph Amaturo of Buckingham most recently maintained a Buy rating on Ford on January 5 with an $18 price target. Although shares of the auto maker have stayed below $16 since July, the analyst believes fundamentals could improve this year thanks to “volume growth and favorable net pricing trends.” According to the five analysts polled by TipRanks in the last 3 months, 4 are bullish on Ford while one remains on the sidelines. The average 12-month price target between these 12 analysts is $18.80, marking a 50% potential upside from where shares last closed.
General Motors Company
Last week, GM made headlines when it announced a $500 million investment in Lyft, a peer-to-peer ridesharing company, in an effort to kick starts a partnership to develop autonomous cars. This is the largest investment GM has ever made in another company. The partnership will draw on GM’s autonomous driving research and Lyft’s ride-sharing expertise, with the idea that the ride-sharing industry will soon be run by self-driving cars.
At CES, GM unveiled its Chevy Bolt EV, its long-range electric car. The new model is expected to become available by the end of 2016, beating Tesla’s Model 3 launch. Impressively, GM brought the Bolt from concept to prototype in just one year. The Bolt touts a wireless charging station, a 360 degree camera, and lane assisting technology to ensure drivers don’t veer. Critics applaud the car’s 200 mile driving range, accessibility, and moderate price tag. After a federal tax credit, the Bolt has a base price of $30,000.
According to TipRanks, three analysts are bullish on GM and three remain on the sidelines. The average 12-month price target between these six analysts is $43.17, marking a 46% potential upside from current levels.
Tech company Nvidia unveiled its Drive PX 2 at CES; a computer to enable self-driving cars that uses artificial intelligence to adapt to driving scenarios. CEO Jen-Hsun Huang touted the lunchbox sized computer, explaining that its power is equal to that of 150 Macbook Pros. The computer will “teach itself” how to read signs, perceive depth, and avert unexpected hazards. Volvo is the first customer to incorporate this new computer into its test fleet. The automobile company will test the device in 100 cars by next year in Sweden.
Nvidia currently focuses on video games, but analysts point to this new autonomous driving technology segment as a growth driver, despite the lack of revenue estimates.
Once CES kicked off on January 6, analyst Alex Gauna of JMP Securities reiterated a Buy rating on the tech company and increased his price target from $33 to $38 in light of the company’s announcement regarding in-car artificial intelligence. Gauna also cited Nvidia’s strong partners and management’s confidence on the company’s near-term video game and virtual reality platforms. According to the 13 analysts polled by TipRanks in the last three months, six are bullish on Nvidia and seven remain neutral. The average 12-month price target between these 13 analysts is $31.67, marking a 7% potential upside from where shares last closed.