Apple shares hit record after report says the company wants to build self-driving car as soon as 2025

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  • Apple shares broke records on Friday following a Businesshala report that the company was ramping up efforts to launch a vehicle.
  • As of Friday afternoon, its stock was trading over 1% and above $160.
  • Apple’s track record in new markets may foreshadow success, Morgan Stanley analyst Katy Huberty wrote in a report following the Businesshala story.

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Apple shares hit a record Friday following a report that the company was ramping up efforts to launch a self-driving vehicle. As of Friday afternoon, Apple stock had risen more than 1% to above $160.

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According to Businesshala News full report, the company is pushing for a 2025 deadline internally for an autonomous vehicle.

Apple’s entry into the electric vehicle space could allow the company to compete with Tesla as well as emerging players such as Rivian and Lucid Motors, and traditional automakers moving away from fossil fuels. EV stocks have jumped in recent months as more consumers and investors bet on what they expect will be the next Tesla.

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Rivian went public last week in one of the biggest IPOs of the year, and rapidly surpassed the market cap of automakers Ford and General Motors. Shares of Rivian and Lucid, which went public in July through a special purpose acquisition company, have been variable whole week.

Apple’s possible entry into the autonomous vehicle space has long been a subject of speculation. Morgan Stanley published two notes following the Businesshala story, and analyst Katy Huberty wrote in one that it “is the first press report for Apple insiders to include a comprehensive number of data points and the idea is potentially open.” The report provides enough detail to provide credibility that Apple’s car launches can both accelerate the adoption of new technology (EV+AV) and expand the addressable market similarly to previous Apple product launches.”

While the autos represent a new effort for Apple, the company’s track record in new markets and its vertical integration capabilities reflect success, wrote Apple analyst Huberty at Morgan Stanley. It has the equivalent of a buy rating on the stock and said the cars present the “clearest path” for Apple to double its revenue and market cap, she wrote.

Apple shares are up 21% this year, bringing the company’s market cap to more than $2.6 trillion.

“We can provide many examples from the past 20 years that show that while Apple may not always be first to market, its innovation engine, differentiation through vertical integration, and manufacturing/operational excellence have made it the first movers to leapfrog. Permitted,” Huberty wrote.

Morgan Stanley’s Adam Jonas, who covers Tesla, referred to Apple’s car as “the ultimate EV bear case” and called the tech giant’s entry into the space “a clear negative to most of our automobile coverage.” Jonas said the pace of adoption of fully autonomous vehicles in the US would be slow because of ethical, legal and technical constraints.

“To be clear, we do not believe that consumers will own a fully autonomous car … but will engage in the service as a subscription or transportation utility,” he wrote.

Watch: Apple shares jump on reports of autonomous vehicle production

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