As automakers and tech companies chase the holy grail of autonomous driving, an analyst said two companies will likely reap a windfall from the potential implementation and adoption.
Tesla, Inc. (NASDAQ:TSLA) and Alphabet, Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) are the two companies that stand to benefit from autonomous driving, said Deepwater Asset Management Managing Partner Gene Munster in an interview with CNBC.
Munster noted that Tesla CEO Elon Musk said on the company’s earnings call the company hopes to achieve a 30 times increase in the amount of training for its full self-driving software within the next 12 months. Google’s Waymo is also another top contender, the fund manager said, adding it doesn’t get a lot of attention.
“It’s a function of time,” he said.
The fund manager’s view came on the same day the California Public Utility Commission approved General Motors Corp.’s (NYSE:GM) Cruise and Waymo to add more vehicles and operate autonomously 24/7 throughout old San Francisco.
Munster said there are three pieces to the topic of self-driving. “Humans are bad drivers … about 40,000-plus people have lost their lives in auto accidents,” he said.
Secondly, the technology is not “yet there,” Munster said. Although Musk said Tesla’s FSD could go live by the end of the year, the fund manager said he feels the technology is a few years away.
Thirdly, there is a political piece to the topic and it’s the pressure point now, the analyst said. Politicians want to “build a narrative around their views” to get people to act, he said.
Munster said, “Driving cars is one of those polarizing topics.”
“In the end, autonomous driving is gonna be here and I think that we are all going to be very happy for that 5-10 years down the road,” he added.
Tesla ended Thursday’s session at $245.34, up 1.30%, and Alphabet closed at $130.21, up 0.05%, according to Zenger News Pro data.
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