This under-the-radar autonomous driving play can rally 65%, says Morgan Stanley

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This under-the-radar autonomous driving play can rally 65%, says Morgan Stanley

A release coming from Aurora Innovation next month could catapult the stock higher, according to Morgan Stanley. The bank initiated the self-driving vehicle stock at an overweight rating and $12 price target. This implies a roughly 65% upside from Aurora’s Friday closing price of $7.27. Shares of Aurora have surged nearly 190% in the past 12 months, and are up 18% this year alone. AUR 1Y mountain AUR 1Y chart “It has been 4 years since AUR went public but the market is finally noticing their autonomous leadership and the stock is up over 3x in the last 9 months (over 5x at its peak 2 weeks ago) — however, this is just the beginning if our view of the opportunity runway ahead, materializes,” wrote Morgan Stanley analyst Ravi Shanker. Shanker pointed to Aurora’s planned April launch of its first commercial driverless operations between Dallas and Houston as a key milestone for the industry that could “unlock a long runway of earnings growth ahead.” Thereafter, Aurora’s serial production is set to begin by either 2026 or 2027. “We have long been believers in the transformational potential of Autonomous Trucking and even though getting to this point may have taken a few years longer than we had initially expected, Trucking finally appears to be at the cusp of an autonomous future,” he wrote. “We believe AUR is leading the charge with arguably the most sophisticated on-highway, Class 8 autonomous solution amongst peers.” At this point, Shanker added, autonomous trucking has gained enough momentum to be considered “a real and credible commercial option” for many trucking fleets. Autonomous truck fleets are much easier to scale than their robotaxi counterparts, and Shanker expects the industry to achieve several thousand miles of driverless operations within the next year. The analyst noted that Aurora’s status as the clear leader in autonomous trucking should allow it to gain an “insurmountable lead” over its competitors. That being said, the total addressable market is large enough to sustain several autonomous players in the long term rather than being a “winner takes all” situation, Shankar added.

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