Autonomous Vehicles Reach 'ChatGPT Moment': A $1.2 Trillion Market Opportunity

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

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.

Autonomous Vehicles Hit Their 'ChatGPT Moment' -- Best Stocks To Watch Now - Amazon.com (NASDAQ:AMZN), Allegro Microsystems (NASDAQ:ALGM)

Autonomous vehicles, or AVs, are no longer a distant dream or science fiction -- they're hitting roads, farms and factories worldwide as breakthroughs in artificial intelligence spark a commercial revolution across a $1.2 trillion industry. In a report shared with clients on Tuesday, Bank of America indicated that AVs have reached a pivotal inflection point thanks to dramatic advances in AI, simulation, and computing power. To date, autonomous robotaxis have completed 186 million commercial miles as of April 2025. These vehicles are now operating in seven global cities, with plans to expand into 20 additional markets in the near future. "Autonomous vehicles are having their 'ChatGPT moment' and are no longer a moonshot," said the bank's analyst Martyn Briggs. See Also: Palantir Stumbles, Solar Stocks Rally As Senate Approves Tax Bill: What's Moving Markets Tuesday? AI, Not Just Automation, Is Driving The AV Revolution Unlike earlier generations of self-driving systems, which relied on hard-coded software and maps, the latest wave of AVs is driven by "physical AI," according to the report. This includes neural networks that continuously learn from real-world data and simulation environments known as "digital twins," which drastically reduce the need for on-road testing. New capabilities like language models are adding "reasoning and interpretability to driving decisions," Briggs said, while supercomputers integrated into vehicles are enabling autonomous driving in new geographies and use cases. The cost to deploy AVs is also falling. Hardware, such as LiDAR sensors, is getting cheaper. Market Potential: Not Just Cars -- Everything That Moves The AV market is broader than just robotaxis. While cars represent a $700 billion opportunity by 2040, Bank of America estimates the total addressable market doubles to $1.2 trillion when including autonomous trucks, public transit, agricultural and mining vehicles. Some off-road AVs are already commercially available, with reported gains of 30% in productivity and 50% labor cost savings in industries like agriculture and mining. Robotrucks are set to disrupt the $4 trillion global freight market. Autonomous trucking is accelerating fast, with 90 active pilot programs worldwide -- two-thirds of which target long-haul freight. Seven of these pilots are nearing commercialization, with the goal of large-scale rollouts by 2027. Briggs said the freight industry is poised for transformation as AVs address "structural challenges like driver shortages" while reducing costs. The story is no longer just about cars: "Anything that moves could become autonomous," Briggs said. How to Invest In Autonomous Vehicle Market: 28 Stocks To Watch The Bank of America report identifies 28 publicly traded companies across six sub-sectors -- vehicle manufacturers, mobility platforms, software, sensors, semiconductors and insurance -- with a combined market cap of approximately $9 trillion. Original Equipment Manufacturers (OEMs): Caterpillar Inc. CAT: Dominates autonomous mining trucks Deere & Co. DE: Precision farming with autonomous tractors Toyota Motor Corp. TOYOF and Hyundai Motor Co. HYMLF: Partnered with Waymo and Aurora XPeng Inc. XPEV: Advanced driver-assistance systems (ADAS) and autopilot EVs Daimler Truck Holding AG DTGHF: Global leader in heavy-duty autonomous trucks Xiaomi Corp. XIACF: Integrating LiDAR and autopilot tech into smart vehicles Mobility Platforms: Uber Technologies Inc. UBER: Expanding AV ride-hailing with Waymo, Aurora and WeRide partnerships Software Providers: Amazon.com Inc. AMZN: Building purpose-built AVs through Zoox Alphabet Inc. GOOG: Operating Waymo robotaxis across U.S. cities Dassault Systemes SE DASTF: Offers digital twin simulations and AV design platforms Baidu Inc. BIDU and Pony.ai PONY: Operating robotaxis and robotrucks in China Sensor Companies: Aptiv PLC APTV, Denso Corp. DNZOF, Allegro MicroSystems Inc. ALGM: Supplying ADAS sensors, radar, and steering systems Hesai Group HSAI and RoboSense XEDSF: Global leaders in LiDAR tech Semiconductor Leaders: Nvidia Corp. NVDA: AV chips, AI training, simulation, and supercomputing platforms Qualcomm Inc. QCOM, Mobileye Global Inc. MBLY, NXP Semiconductors NV NXPI: Enabling computer vision and ADAS systems Infineon Technologies AG IFNNF, STMicroelectronics NV STMEF, Horizon Robotics HRZRF: Leading providers of AV-specific silicon and AI hardware Insurance: Progressive Corp. PGR: Developing AV insurance products tailored for new risk profiles. Surprisingly, one name was notably absent from the Bank of America's list of autonomous vehicle investment picks: Tesla Inc. TSLA. Now Read Nvidia, Palantir Fuel Historic Tech Rally -- And It's Far From Done Image: Midjourney ALGMAllegro Microsystems Inc$34.440.12%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum87.90Growth7.14QualityNot AvailableValue26.99Price TrendShortMediumLongOverviewAMZNAmazon.com Inc$219.98-0.22%APTVAptiv PLC$71.47-0.28%BIDUBaidu Inc$86.450.48%CATCaterpillar Inc$392.160.32%DASTFDassault Systemes SE$35.19-%DEDeere & Co$508.36-%DNZOFDenso Corp$15.1511.4%DTGHFDaimler Truck Holding AG$46.30-%GOOGAlphabet Inc$176.63-0.16%HRZRFHORIZON ROBOTICS B by HORIZON ROBOTICS$0.8500-%HSAIHesai Group$20.750.39%HYMLFHyundai Motor Co$155.44-%IFNNFInfineon Technologies AG$41.53-%MBLYMobileye Global Inc$18.160.50%NVDANVIDIA Corp$152.34-0.63%NXPINXP Semiconductors NV$221.19-0.01%PGRProgressive Corp$264.30-%PONYPony AI Inc$13.15-0.38%QCOMQualcomm Inc$159.860.29%STMEFSTMicroelectronics NV$27.70-1.50%TOYOFToyota Motor Corp$17.25-%TSLATesla Inc$302.440.58%UBERUber Technologies Inc$92.360.25%XIACFXiaomi Corp$7.77-%XPEVXPeng Inc$18.350.49%XPNGFXPeng Inc$9.72-%Market News and Data brought to you by Benzinga APIs