Qualcomm (QCOM) Stock Could Soar on Autonomous Car Strategy
The recent legal battle between consumer technology giant Apple Inc. (NASDAQ:AAPL) and computer-tech icon QUALCOMM, Inc. (NASDAQ:QCOM) has not only been a fascinating one, it’s been a stand-off that’s captured more than its fair share of headlines at the expense of other things Qualcomm stockholders arguably needed to know about but didn’t hear.
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For example, last week Qualcomm unveiled a commercial-ready technology dubbed Cellular-V2X; V2X means “vehicle to everything.”
You read that right, and your knee-jerk thought is the correct one. Cellular-V2X marks the advent of the truly connected car that can and likely will serve as the groundwork for widespread use of autonomous cars.
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Though it’s a longterm initiative, it’s something owners of QCOM stock should be excited about.
Qualcomm’S Cellular-V2X Chipset
It’s stunning that more mainstream media venues didn’t take notice of last Friday’s press release. Perhaps the fallout from hurricane Harvey took precedence, or maybe reporters were just getting an early start on the long Labor Day weekend.
Whatever the case, Cellular-V2X chipset is ready to roll.
The company’s press release explains:
“C-V2X direct communications is designed to support active safety and helps enhance situational awareness by detecting and exchanging information using low latency transmission in the globally harmonized 5.9 GHz ITS band for Vehicle-to-Vehicle (V2V), Vehicle-to-Infrastructure (V2I) and Vehicle-to-Pedestrian (V2P) scenarios without the need for a Subscriber Identity Module (SIM), cellular subscription or network assistance.”
In plain English, the C-V2X platform knows and understands everything that’s going on around the vehicle — even when a passenger doesn’t — and can automatically communicate with other such-equipped vehicles as needed to safely navigate through traffic. Thus, it lays the groundwork for putting out truly autonomous cars.
Or for the techies, the C-V2X “is a 3GPP Release 14 specifications for PC5-based direct communication. Qualcomm’s C-V2X design and solution features the 9150 chipset which has integrated Global Navigation Satellite System (GNSS) capability including an application processor that runs the Intelligent Transportation Systems (ITS) V2X stack and a Hardware Security Module (HSM).”
Whatever the case, superficially it may not seem like a big leap forward — or even a leap forward at all. The aforementioned Apple has been dabbling with self-driving cars for a while now, as has Alphabet Inc (NASDAQ:GOOGL, NASDAQ:GOOG). Tesla Inc (NASDAQ:TSLA), in fact, has already commercialized self-driving cars. It’s called Autopilot, and though it requires a driver to approve its use by engaging, most Tesla vehicles are equipped to get you from point A to point B using an array of sonar and radar sensors.
Tesla’s technology still doesn’t do all that Qualcomm’s Cellular-V2X platform can do. Unlike Tesla’s Autopilot, the C-V2X is built from the ground up to actively communicate with buildings, the road, communication towers and other cars as well. It also maintains awareness of its surroundings and potential harm to provide a fully-managed transportation experience.
Perhaps more important, at least some automakers are on board with the idea even if they’re not using it yet. Representatives from Ford Motor Company (NYSE:F) and Audi (owned by Volkswagen AG (ADR) (OTCMKTS:VLKAY)) chimed in on the news with supportive statements, while the Science Applications International Corporation — or SAIC — went as far as to say “We deem C-V2X technologies as the best choice, and look forward to utilizing these technologies in V2X.”
It’s all just lip-service at this point, since the Cellular-V2X chipset isn’t available en masse just yet. It’s coming though, from a fairly unlikely and unexpected name.
Bottom Line for QCOM Stock
Qualcomm stock is a lot of things, but an investment in self-driving cars isn’t exactly one the market quite knows how to process yet. And, truth be told, it will be a while before its cellular vehicle means something to the top or bottom line.
The technology is coming though, giving QCOM stock some much-needed firepower with investors that have increasingly become disinterested in an increasingly unrewarding Qualcomm. The company’s chips and communication technologies just aren’t the head-turners they used to be.
At stake is a piece of an autonomous vehicle market expected to be worth more than $60 billion by 2027. Let’s just hope Qualcomm doesn’t get lapped in the meantime. Fortunately for it and QCOM stock holders, there’s nothing else nearly as commercial-ready as the company’s C-V2X chipset, leaving it well positioned to become the de facto standard.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter.
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