Bank of America says autonomous cars are having their 'ChatGPT' moment. How to play it

CNBC

02-07-2025

The "ChatGPT moment" for autonomous vehicles has finally arrived, according to Bank of America, which sees a trillion-dollar market for the space. The firm detailed a list of stocks to invest in the theme. In a Tuesday report, Bank of America identified more than 200 operational autonomous vehicle projects globally. Fully commercial robotaxis are running in seven cities — including Waymo in Austin , San Francisco and Los Angeles, and Baidu's Apollo Go in Wuhan, China — and 20 more are in progress, according to the firm. "Autonomous vehicles (AVs) are having their ChatGPT moment and are no longer a moonshot," strategist Martyn Briggs said in a note to clients. "The main 'drivers' are breakthroughs in [artificial intelligence] and compute, as well as falling sensor costs, enabling rapid commercial deployment," he said. "On top come an increasingly favourable regulatory backdrop and a US-China 'car race.'" Briggs estimated that cars represent the largest addressable robotaxi market, worth $700 billion by 2040. However, the total market rises to $1.2 trillion by the same year when accounting for trucks, freight, logistics, public transport and agriculture. Stocks behind the brains and bodies of AVs Several companies — including rideshare platforms, original equipment makers, software developers, semiconductor companies and sensor makers — stand to benefit from the boom in autonomous vehicles. Bank of America mentioned nearly 20 beneficiaries, including Caterpillar , Uber , Amazon , Nvidia , Aptiv , Baidu and Mobileye , of the trend as commercial deployments ramp up. Nvidia is a name that's been top-of-mind for investors when it comes to AI. The company is forging a new growth runway in autonomous technology, and could be a huge player in software development for OEMs. Analyst Vivek Arya highlighted Nvidia's three-computer solution for AVs: Nvidia DGX for AI model training, its DRIVE AGX complete autonomous driving platform, and Omniverse and Cosmos platforms for physical AI applications. He rates the chip giant a buy. "Nvidia (NVDA) is a pioneer in the accelerated compute space who stands to benefit from AV adoption," Arya said. "As the automotive industry shifts towards electrification and automation, we expect the need for compute power and AI training models on the car presents an incremental opportunity for Nvidia in AVs." Arya's $180 price target on Nvidia suggests upside of 17% from Tuesday's close. Shares are up about 17% in 2025. NVDA 1Y mountain Nvidia stock performance over the past year. Caterpillar is a little-known play on autonomous tech. The company began with offering truck applications for autonomy, but now provides several solutions for mining automation — such as drills, haulers, and underground equipment, Bank of America said. The firm rates the stock a buy, but its price target suggests shares could slip 1.5% from Tuesday's close. Caterpillar is up 9% in 2025. According to analyst Michael Feniger, the company's "formula for success in autonomy" includes its scalable platform on autonomous fleets, as well as its ability to retrofit equipment and fulfill demand for new trucks. Feniger added that Caterpillar receives revenue from its autonomous business through its hardware applications (radar and sensors) and software fees at implementation. "Autonomous implementation likely means fewer trucks operating at higher utilization driving greater parts and service opportunity," he said. Rideshare company Uber is set to benefit from its partnerships with more AV companies, according to Bank of America. "The value of Uber's capability as an AV network partner, fleet operator, and demand generation service for AV providers is supported by a growing number of AV partners (now with 18 partners across AV industry globally, including Waymo in the US)," analyst Justin Post said. "We think over 50% of Uber's value is from mobility, and AV execution will be a key driver for the stock." He rates Uber as a buy. The firm's price target of $97 calls for more than 5% upside from Tuesday's close. Shares of Uber have rallied 52% year to date.