Goldman Sachs Identifies Key Stocks for Autonomous Vehicle Growth

As the autonomous vehicle (AV) industry gears up for significant expansion in the coming years, Goldman Sachs has identified several stocks that could serve as beneficial investments in this burgeoning sector. Analyst Mark Delaney emphasized in a recent report that the focus for investors is shifting from the feasibility of AV technology to the anticipated growth of the market. He notably posited that by 2030, the U.S. rideshare market occupied by AVs could reach a valuation of $7 billion, accounting for 8% of the total rideshare market.

Currently, more than 1,500 robotaxis are operational, primarily from Waymo, a subsidiary of Alphabet Inc. Delaney projected that commercial operations could extend to seven cities by the end of 2026, expanding from the existing four locations: San Francisco, Los Angeles, Phoenix, and Austin, Texas. He stated, "With this rollout from Waymo, coupled with planned launches from others including Tesla and Zoox, we expect over 1,800 commercial autonomous vehicles in the U.S. by the end of 2025 and 35,000 by 2030," attributing this growth to advancements in safety and decreasing operational costs.

Despite the optimistic forecasts, Delaney cautioned investors to remain vigilant regarding potential risks associated with AV investments. He indicated that concerns surrounding AV-related risks could be overstated, particularly in relation to companies like Lyft, which he believes will play a pivotal role in the evolving AV landscape. In his analysis, Delaney highlighted several companies that could benefit from this AV revolution.

Tesla emerged as a prominent player, particularly with its upcoming robotaxi service launch in Austin. CEO Elon Musk indicated in May that Tesla plans to initiate this service with 10 vehicles, with potential future expansions to thousands. Delaney remarked, "The degree to which Tesla can achieve differentiated scale and technology will be crucial for its long-term profitability in the robotaxi sector." While he maintains a neutral outlook on Tesla stock, he anticipates that profits may increase in the medium to long term due to advancements in full self-driving (FSD) and AV technology.

Additionally, Delaney identified TE Connectivity as another potential benefactor from the AV sector's growth. The company specializes in data transfer solutions, a critical component for both partially and fully autonomous vehicles. "Connectors for data connectivity constitute about 10% of the total connector value per vehicle and represent an attractive growth opportunity," he noted, assigning a buy rating with a price target suggesting over 13% upside potential.

In terms of ridesharing dynamics, Delaney suggests that while AV ridesharing remains in its nascent stages, the risks perceived by investors regarding companies like Lyft may be more than adequately reflected in their stock prices. He foresees that AV operators and fleet owners will increasingly form partnerships in the coming years, positioning Lyft as a vital component of the hybrid and AV ecosystem by driving demand and managing vehicle fleets. Delaney has assigned a buy rating to Lyft with a price target implying a more than 35% upside from its recent trading levels.

In summary, as the AV market continues to mature, investors are encouraged to consider stocks like Tesla and Lyft as viable opportunities in this transformative industry. The anticipated growth trajectory not only signifies advancements in technology but also broader shifts in transportation paradigms, with significant implications for the economy and society at large. As this sector evolves, ongoing analysis and strategic investment will be essential for stakeholders aiming to navigate the complexities of the autonomous vehicle landscape.