There’s no question that advanced driver assistance systems (ADAS) are poised for tremendous growth in coming years, but there’s no reason to wait for the rubber to hit the road to invest in this new technology. Baird analyst Tristan Gerra sees three focus areas for investors looking to profit from the rise of autonomous vehicles: auto suppliers, semiconductor suppliers and technology companies.

Gerra anticipates that ADAS penetration will balloon from 20 percent today to as high as 75 percent by 2020. By 2019, the automotive semiconductor industry is expected to reach $28 billion.

“We believe competitive landscape will ultimately be decided based on launches in 2018–2022 when Level 3 & 4 automated driving sees higher adoption (these contracts will be awarded over [the] next 18-24 months),” Gerra explained.

A Few Names

He noted that Alphabet Inc GOOGL GOOG has already achieved full automation in 99 percent of driving scenarios.

When it comes to ADAS auto suppliers, Baird prefers…

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