This decade promises to unleash a number of technologies that just existed on the drawing board until now. While much as been made about electric vehicles this past decade as they’ve gone into mainstream production, the real innovation is with automation.
The rise of self-driving vehicles can free up a morning or evening commute, allow someone to work on other tasks or relax while being driven around. On the commercial level, the technology is even more promising.
That’s because self-driving truck technology can allow for less downtime for the trucking industry, and make up for a labor shortage impacting parts of the supply chain right now. While that trend won’t change overnight, investors thinking about opportunities for the long haul might consider an automation play now.
One of the more attractive ones for commercial vehicles is TuSimple (TSP). The early-stage commercial automation startup shed 35 percent in the past year, as investors looked away from the technology. Longer-term, that could be a mistake.
Action to take: Shares have recently been upgraded, and revenue is up 206 percent compared to the prior year. The company even reported positive earnings in the most recent quarter, trading at 30 times earnings. With a market cap of just $7.5 billion, however, it’s clear that shares can be worth far more over time.
Traders might like a longer-term play, like the January 2023 $40 calls. With a year to play out, the options last carried a bid/ask spread of about $6.40, but on a big rally this year could deliver triple-digit returns.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.