Tesla stock doesn’t get anywhere near the same fanfare it used to. I blame SpaceX — it’s a shiny new stock compared to Tesla, which has been around since dinosaurs roamed the Earth back in 2010!
Still, the share price is up about 23,650% since going public — a mind-boggling return.
However, with Tesla now boasting an enormous $1.2trn market cap, I doubt the stock will produce a spectacular return from here. For that, I think investors will have to look elsewhere, to smaller innovative firms.
Here’s one with enormous growth potential…
Similarities
Its name? Aurora Innovation (NASDAQ:AUR), in which I see some similarities with a young Tesla.
For starters, Tesla builds robotaxis while Aurora is working on driverless trucks. So they’re both pioneering autonomous driving technology, albeit in different ways (Tesla manufactures the entire vehicle whereas Aurora puts software into trucks).
One of Aurora’s co-founders actually led Tesla’s Autopilot programme between 2015 and 2016, while CEO and co-founder Chris Urmson headed Google’s self-driving programme (now Waymo) for seven-and-a-half years. Waymo now does over 500,000 driverless taxi ride a week across the pond.
At $6.30 per share, Aurora’s market cap is $12.5bn. That’s similar to Tesla’s in mid-2013, a year after it started Model S deliveries. I’d say Aurora is at a similar stage: just starting to ramp up commercial operations.
Interestingly, growth stock specialist Scottish Mortgage, which invested in Tesla in 2013, backs Aurora today.
Aurora’s autonomous trucks, capable of operating 24/7, promise to enhance fuel efficiency, reduce accidents, and address driver shortages.
Scottish Mortgage.
30,000 driverless trucks by 2030
By the end of 2026, the company expects to have 200 driverless trucks in operation. But earlier this week, Aurora set a target of reaching 30,000 trucks by 2030.
Now, many people in the UK are only just getting their heads around robotaxis, so the idea of an articulated lorry driving itself down the motorway probably sounds like science fiction. Or something worse — they’re called juggernauts, after all!
Yet Aurora Driver-powered trucks have already driven hundreds of thousands of driverless miles, with zero company-attributed collisions. Customers include Hirschbach, Werner, and Volvo (starting next year).
Today, Aurora operates autonomous lanes connecting Dallas, Fort Worth, Houston, and El Paso in Texas, extending west into Phoenix. But California also recently permitted the deployment of driverless trucks.
High-risk, high-reward stock
Currently, Aurora is generating minimal revenue (just an $80m revenue run rate is forecast this year) and no profits. So this adds considerable risk, as would a serious incident involving one of its trucks.
But if there’s ever a company that could become significantly larger in future, it’s this one. The opportunity is simply enormous, with the US truck freight market valued at more than $1trn (near-24/7 operations would enlarge it further).
Revenue is expected to hit $5bn+ by 2030, and unit economics should be very attractive. After all, Aurora’s asset-light driver-as-a-service business model charges a fee per mile driven (lower than a human trucker). It’s expecting positive free cash flow in 2028.
Of course, it’s still early days. There’s no guarantee that Aurora will emulate Tesla and the stock’s very speculative. But if it reached half Tesla’s size, it would be a 50-bagger for those buying and holding today.
So adventurous investors might want to take a closer look.
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Ben McPoland owns shares in Scottish Mortgage and SpaceX.
This story originally appeared on Motley Fool
