Do You Have These Top Automotive Stocks On Your Watchlist? 4 In Focus
Any seasoned auto investor can tell you that the industry has taken them on a ride over the past year. When the stock market crashed in March, automotive stocks were hit hard. However, as the dust began to settle in late 2020, automotive stocks have risen to become some of the top growth stocks out there. We have the emergence of electric vehicles (EVs) and autonomous vehicles (AVs) to thank for this.
Firstly, we saw the meteoric rise of EV company Nio (NYSE: NIO) whose shares are now up by over 1,500% in the past year. Back in January, the company reported that its monthly sales quadrupled year-over-year. Rising EV demands aside, the industry is also being boosted by global green initiatives. Next, we also have the emerging AV market. AVs add another dimension of transportation into the mix. They are said to improve road safety while making things more convenient for drivers in general. Big tech players such as Amazon (NASDAQ: AMZN) and Alphabet (NASDAQ: GOOGL) are making plays in this space. Not to mention, conventionally used cars are also making a comeback, in light of vaccination efforts coupled with a weakened economy.
By and large, there is no shortage of automotive stocks for investors to choose from. Considering the current industry tailwinds, are these the top automotive stocks to watch this week?
Best Automotive Stocks To Watch Right Now
- BorgWarner Inc. (NYSE: BWA)
- Baidu Inc. (NASDAQ: BIDU)
- General Motors Company (NYSE: GM)
- Tesla Inc. (NASDAQ: TSLA)
To begin with, we will be looking at BorgWarner. In brief, the company is a global product leader in clean and efficient automotive tech solutions. BorgWarner provides auto parts and services for combustion, hybrid, and electric vehicles. Moreover, the company operates out of manufacturing and technical facilities in 96 locations across 24 countries. For one thing, the company provides vital aftermarket auto solutions for EVs as well as conventional vehicles. This would mean that even as more consumers turn towards EVs, BorgWarner can still cater to their automotive needs. Notably, BWA stock is in focus right now as BorgWarner just made a solid acquisition yesterday.
Specifically, it acquired German lithium-ion battery system developer, AKASOL. This is a fantastic play by BorgWarner as AKASOL designs and manufactures low-cost and adaptable clean energy batteries for vehicles of varying sizes. No doubt, AKASOL would synergize with BorgWarner's expanding electrification portfolio.
As BorgWarner bolsters its existing EV-related services, the company appears to be gearing up for the global rise of EV adoption. All this paired with a strong recent quarter fiscal reported last week would catch investors' attention. Could this be a good time to watch BWA stock? You tell me.
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Following that is Chinese multinational tech company Baidu. The company is one of the biggest names in the artificial intelligence (AI) and internet tech fields globally. For this reason, its technology and expertise have been put to great use in the EV and AV industries. For EVs, the company is currently collaborating with multinational auto manufacturer Geely, who is well-versed in EV development. On the AV front, Baidu unveiled the world's first AV Mobility-as-a-Service platform to the citizens of Guangzhou, China, last week. Safe to say, Baidu has been hard at work building its automotive portfolio. Likewise, BIDU stock has been on a tear with gains of over 130% in the past year.
On top of all that, Baidu is allegedly in talks to raise money for a new AI semiconductor chip company. According to CNBC, several venture capital firms are discussing the possibility of investing in Baidu's chip firm. There are also mentions that this semiconductor division would be looking to sell towards several industries including automakers.
Indeed, you would be right to think that this is an extremely strategic play by the company. Especially with the recent mention of global chip shortages by Qualcomm (NASDAQ: QCOM). Should things go as planned, I could see this playing out well for BIDU stock. Do you?
General Motors Company
Our next entry is automotive juggernaut General Motors. The company is the largest automaker in the U.S. Similar to peers such as Ford (NYSE: F), the company has made the shift towards the booming EV and AV industries. With plans to be carbon neutral by 2040, General Motors revealed its plans to reduce its carbon footprint last month. In the long run, this would likely mean more focus on its EV portfolio.
Additionally, the company is also working with tech giant Microsoft (NASDAQ: MSFT) on commercializing AVs. It seems like this old-timer in the automotive industry is intent on keeping up with the latest trends in transportation. Similarly, GM stock has risen to new heights, blowing past its pre-pandemic levels.
More recently, the company seems to be keeping up its momentum as well. On Thursday, it announced a $100 million investment into two of its manufacturing plants in the U.S. According to General Motors, these investments would be put towards boosting the production of transmissions for its two flagship pickup trucks. General Motors cites strong demand for the two pickups as a key reason behind this move. Additionally, the company also unveiled a new iteration of its Chevy Bolt EV on Sunday. General Motors seems to be firing on all cylinders right now. With all this in mind, will you be adding GM stock to your watchlist?
Last but not least, we will be looking at EV frontrunner, Tesla. For starters, you can't deny that the company is a huge name in both the automotive market and the stock market. Given its industry-leading clean energy portfolio, Tesla is a prime candidate to benefit from growing government spending on green initiatives. Earlier this month, the company also made headlines with a massive $1.5 billion investment in Bitcoin. As the overall adoption of the cryptocurrency rises, Tesla also mentioned plans to accept Bitcoin as a form of payment. Meanwhile, TSLA stock has skyrocketed in value as well. It is currently looking at gains of over 1,000% since the March lows. Despite all this, Tesla shows no signs of slowing.
On Sunday, news broke of Tesla's plans to set up an EV manufacturing unit in India. According to Reuters, the new plant will be based in the southern Indian state of Karnataka. The report was apparently confirmed by the local government in an official statement as well. India, like most countries now, is keen on reducing its carbon footprint concerning its transportation industry.
As such, Tesla could be looking at a significant boost to its addressable market in this expansion. At the same time, India did express plans to invest $4.6 billion into companies involved in advanced battery manufacturing in the country. Could this mean another record year for TSLA stock? Your guess is as good as mine.
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