A Prime Minister Takes a Ride
December 10, 2023
This Week in The Autonomy Economy, The Road to Autonomy Index returned 1.19%, Prime Minister Mark Rutte of The Netherlands took a ride in a Waymo autonomous vehicle on public roads in Phoenix and Uber is being added to the S&P 500 on December 18th.
2023 has been a great year for Uber under the leadership of Dara Khosrowshahi. The stock has returned 143.30% YTD, as the company has shed assets to focus on its core business — a platform. Uber went back to its roots and shareholders have rewarded the company.
Alphabet and Uber are The Road to Autonomy Index component companies
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What’s Moving the Markets
Ubering into the S&P 500
Prior to the markets opening on Monday, December 18th, Uber will be added to the S&P 500. At a $126 billion dollar market cap, Uber is currently the largest U.S. company by market capitalization that wasn’t in the S&P 500.
Ralph Schackart, Internet Equity Analyst at William Blair stated the following about Uber joining the S&P 500 in a December 3, 2023 research note.
We believe this is a positive for Uber shares given that the S&P 500 is one of the most widely followed benchmarked indices in the equity markets. We believe that Uber will transition from “nice to own” by investors to an “allocation consideration” now that it is included in the S&P 500. Moreover, an addition to the S&P 500 can be a significant driver for a stock as it means that funds that passively track the S&P 500 will have to allocate funds toward Uber.
– Ralph Schackart, William Blair
Our take: Joining the S&P 500 is a major milestone for any company. Looking back in history, one has to credit the Uber board for making the right decision to hire Dara Khosrowshahi as CEO in 2017. During his tenure as CEO, Mr. Khosrowshahi stabilized the company, shed non-core assets, grown revenue and now has it joining the S&P 500. Uber will play a vital role in the emerging autonomy economy.
Uber is a The Road to Autonomy Index component company
Cruising to No Value
Morgan Stanley analyst Adam Jonas reiterated his 12-month price target of $40 for GM (Current price: $33.75) in a December 5, 2023 research note while assigning no value for EVs, Cruise or China.
We remain OW GM but have marginally lower conviction following the stock’s bounce and ‘unchanged’ strategy. The ICE business has under-appreciated value and see scope for significantly reduced spend into an oversupplied EV market. Our $40 target includes no value for EVs, Cruise or China
– Adam Jonas, Morgan Stanley
GM investors have to wonder, what the future of the Cruise business will be as Alphabet’s Waymo cruises by them as the Cruise fleet remains grounded while GM restructures the business.
Our take: Cruise has trust issues that the company will need to overcome with regulators, legislators and the general public. Cruise can overcome the trust issues, but it will be a long, windy road until the company is up and running at full speed. The big question heading into 2024, how much longer and to what extent will GM continue to fund Cruise.
GM is a The Road to Autonomy Index component company
Bernstein Best Idea, Short Tesla
As we head into 2024, the Tesla bears are once again roaring. Bernstein analyst Toni Sacconaghi, Jr has assigned a $150 price target (Current price: $243.84) and called shorting Tesla one of their “best ideas” for 2024 in a December 8, 2023 research note.
The great Tesla Bulls vs Bears debate will continue into 24 and beyond. It’s been a rough 5 years for Tesla bears, as Tesla’s stock has returned 900.16%.
In his note, Toni Sacconaghi, Jr stated that he fundamentally believes that the Tesla product family is reaching saturation.
Tesla continues to have a demand issue. We believe demand weakness stems from Tesla’s narrow (and expensive) product family which is reaching saturation, and continued competition in the EV space. While there has been some recent weakening of EV demand, we do not believe this is a primary contributor.
– Toni Sacconaghi, Jr, Bernstein
The market for electric vehicles is clearly dividing into two markets —Tesla and everyone else. We believe that Tesla will continue to grow sales in 2024, and we are watching to see what happens with the Dojo supercomputer and the advancements Tesla continues to make with FSD (Full Self-Driving).
Our take: In our opinion, at some point Tesla will offer AI cloud computing services on the Dojo supercomputer and figure out Full Self-Driving. When this happens, Tesla will usher in the next generation of cloud computing services and the era of personally owned autonomous vehicles.
Read Bernstein’s Tesla Bear Case Report here (PDF)
Tesla is a The Road to Autonomy Index component company
Social Buzz
A Prime Minister Takes a Ride
Prime Minister Mark Rutte of The Netherlands took a ride in a Waymo (Alphabet) autonomous vehicle this week in Phoenix on public roads. Prime Minister Rutte became the first sitting Prime Minister or President in the world to ride in an autonomous vehicle on public roads.
This is a positive for the industry as it demonstrates the safety and reliability of autonomous vehicles. We would encourage more world leaders to follow Prime Minister Rutte’s lead and take a ride in an autonomous vehicle.
Autonomy is the future and it’s good for the economy.
Alphabet is a The Road to Autonomy Index component company
Community Notes, Holding The Teamsters Accountable
The Teamsters are back at it once again spreading misconceptions about autonomous vehicles to protect their own special interests. This time, Community Notes held The Teamsters accountable and added context to their misleading tweet.
X Community Notes added the following context:
Swiss Re, the second largest reinsurer globally, studied data on 3.8 million miles driven by autonomous vehicles and concluded they are significantly safer and easier to insure than human drivers.
X Community Notes
With Community Notes on X, the spread of misinformation about autonomous vehicles will begin to slow as those who post and share misinformation will now be held accountable.
Houston, We have a Public Relations Problem
Autonomous vehicles have a public relations problem. Leave the World Behind (Netflix – December 2023) is only exacerbating the problem by tapping into a widely held misconception that autonomous vehicles are not safe.
If you thought Upload (S1 E1 – Welcome to Upload, April 30, 2020, Amazon Prime) was bad, Leave the World Behind is about to take the hysteria to the next level.
Look for special interests to use this clip featuring Julia Roberts to further promote their agenda and misconceptions about autonomous vehicles.
The Road to Autonomy Index® / Weekly Performance
The Road to Autonomy Index® is a high-definition lens into the emerging world of autonomous vehicles. It is the world’s first and only pure-play index designed to measure the performance of the autonomous vehicle/truck market.
For the Week of December 4, 2023, The Road to Autonomy Index returned 1.19%, the S&P 500 returned 0.41% and the NASDAQ 100 returned 1.73%.
The Road to Autonomy Index outperformed by the S&P 500 by 0.78% and underperformed the Nasdaq 100 by 0.54%.
The top performing stocks in The Road to Autonomy Index this week were:
- Uber returned 7.59%
- Daimler Truck AG returned 7.07%
- GM returned 4.30%
Follow The Road to Autonomy Index on Google Finance
The Road to Autonomy Index Component Companies
Latest The Road to Autonomy Podcasts
The Road to Autonomy podcast hosted by Grayson Brulte is a podcast featuring unconventional conversations about the future of mobility and the emerging autonomy economy. New episodes every Tuesday.
Uber Freight: $18 Billion of Freight Under Management and Growing
Olivia Hu, Head of Autonomous Trucking, Uber Freight recently joined The Road to Autonomy podcast where she discussed how autonomous trucking is going to complement and accelerate the growth of Uber Freight’s $18 billion of freight under management platform.
Listen on The Road to Autonomy | Apple Podcasts | Spotify
Tuesday, December 5, 2023
Autonomous Trucking is a Big Business Opportunity
Lee White, Founder & President, LM White Consulting joined The Road to Autonomy podcast to discuss why autonomous trucking is a big business opportunity and what the economics of that business will look like when autonomous trucks are operating commercially.
Listen on The Road to Autonomy | Apple Podcasts | Spotify
Tuesday, November 28, 2023
Autonomous Tractors Take the Wheel Amidst Labor Shortages
Sam Abidi, Chief Commercial Officer, Monarch Tractor joined The Road to Autonomy podcast to discuss Monarch’s autonomous MK-V tractor and how the growing labor shortages are accelerating the adoption of autonomous tractors on farms around the world.
Listen on The Road to Autonomy | Apple Podcasts | Spotify
Tuesday, November 21, 2023
Subscribe to This Week in The Autonomy Economy™
A weekly newsletter featuring insight and analysis on the autonomy economy™ and how the financial markets are viewing its emergence.
All price references and market forecasts are as of the date that this newsletter has been sent. The Road to Autonomy is not providing any financial, economic, legal, accounting, or tax advice or recommendations in this newsletter. The information contained in this newsletter does not constitute investment advice and should not be relied upon to evaluate any potential transaction.
Inclusion of a security within The Road to Autonomy Index® is not a recommendation by The Road to Autonomy Indices LLC to buy, sell, or hold such security, nor is it considered to be investment advice.
