The Death of Auto Stocks

Is this the end of the line for auto stocks?

In many cases, it sure seems that way.

Since the start of the year, nearly all the major auto stocks are down.  

The only carmaker that really hasn’t been sideswiped by excessive tariffs and a slowdown in sales is BYD (OTCBB: BYDDY).  That stock is actually up more than 35%, YTD.

In fact, just a few weeks ago, BYD announced earnings and absolutely crushed it.  Net profit increased 73.1% in Q4 to $2.1 billion, and for FY, 2024, profit climbed 34%. 

Just five years ago, BYD ranked as the 49th best selling car brand in the world.  Today, BYD is the third best selling car brand in the world.  That’s not trivial.

It should also be noted that BYD recently announced it launched a $5.2 billion share sale on the Hong Kong exchange.  This transaction is Hong Kong’s biggest share sale since food-delivery firm Meituan raised $10 billion in 2021.  The market ate it up, pushing the stock up over $100 a share.

Of course, it remains to be seen how well BYD will perform this year.  Particularly with Trump’s trade war sending shockwaves through the global markets. 

Are Auto Stocks Ripe for the Picking?

I’m always looking for a bargain.  And typically, plenty of bargains can be found after a correction.  But this time, it’s a little different.  Mostly because no one has any idea what the real end game is here.

Is this just part of Trump’s negotiation plans?  Or does the president really believe he’ll be able to successfully battle the national debt and lower taxes on Americans with tariffs?  A theory, by the way, that most competent economists can disprove in a single spread sheet.  

Regardless of how this all plays out, one industry that will be feeling the pain this year is the auto industry.  Even before these tariffs kicked in, new car sales were falling.  This, mostly as a result of higher retail prices, escalating insurance premiums, inflation fears, and younger generations choosing to eschew car ownership while embracing ride-sharing. 

Truth is, if you’re looking to build and protect your wealth, auto stocks should not be on your “buy” list. 

Hell, even Tesla knows this.  Which is why the company is going all-in on AI robots now.  That’s where the money is.  Not its cars.  Musk even confirmed it.  Saying that the company’s AI-powered robots could drive Tesla’s market cap to a mind-blowing $25 trillion.  That’s more than half the value of the S&P today!

But here’s the rub…

Tesla’s AI robots, while truly impressive, aren’t the most advanced in the U.S.  Nor are they as close to mass market sales as the leader in this space.  That distinction belongs to an Asian engineering company that now owns the most advanced AI robotics technology in the U.S.  And the best part is, you can buy shares of this thing for pennies.

Advanced robotics technology is moving beyond science fiction and into our daily lives more and more.  From healthcare, education, and manufacturing, to even retail applications in the service industry.  In fact, it’s not a stretch to say that these robots WILL play a pivotal role in our society in the years and decades to come.  And they’ll sure as hell generate far more revenue than any of the auto stocks out there.  And that includes BYD.

Bottom line: if you’re looking for long-term growth potential behind the backdrop of this latest correction, look no further than the company that’s dominating the AI robotics market.  And if you don’t believe this stock is crushing it, consider the fact that this company did $122.1 billion in revenue last year.  You read that correctly.  $122.1 billion!

The company that makes the most advanced robots on the planet did more than $100 billion in revenue in a single year.  Which is why our Energy & Capital research team recently put together this short report which shows you just how advanced these robots are, and of course how to buy the stock today.