Goldman Sachs names top 3 autonomous vehicle stocks to buy and hold in 2025

Goldman Sachs recommends Lyft (LYFT), Alphabet (GOOGL), and TE Connectivity (TEL) as top autonomous vehicle (AV) stocks for 2025, anticipating accelerated growth in the AV market. Analyst Mark Delaney sees Lyft benefiting from AV partnerships with a $20 price target, Alphabet's Waymo leading the US AV market with a $220 price target, and TE Connectivity gaining from high-speed connectivity demand in AVs with a $184 price target; all three stocks have 'buy' ratings and offer potential upside, with GOOGL and TEL also providing dividend yields of 0.48% and 1.73% respectively.

Analysis

Goldman Sachs presents a bullish outlook on the autonomous vehicle (AV) sector, shifting the investment focus from technological viability to the pace of market penetration and expansion. The firm projects that AVs will capture 8% of the U.S. ride-share market by 2030, underpinning its 'buy' ratings on three distinct plays within the ecosystem. For Lyft (LYFT), Goldman Sachs views AV-related risks as fully priced in, anticipating the company will leverage partnerships to become a key demand aggregator; this view is supported by a $20 price target, implying nearly 40% upside, and a recently increased $750 million share repurchase authorization. Alphabet (GOOGL) is positioned as a direct technology leader through its Waymo subsidiary, which already demonstrates significant market traction with a quarter-million weekly rides, justifying a $220 price target with over 25% potential upside and a 0.48% dividend yield. Finally, TE Connectivity (TEL) is recommended as a critical component supplier, poised to benefit from 'incremental content opportunities' in high-speed data connectors, which constitute about 10% of total connector value per vehicle. TEL's $184 price target suggests a 13% gain, complemented by a compelling 1.73% dividend yield for income-oriented investors.

Key Decisions for Investors

• Investors seeking exposure to the autonomous vehicle theme should consider a diversified strategy across the value chain, allocating capital to a network operator like Lyft, a technology leader like Alphabet, and a critical component supplier like TE Connectivity.
• For growth-focused investors with a higher risk tolerance, Lyft's potential 40% upside and supportive $750 million buyback program present a compelling, albeit speculative, opportunity tied to the successful execution of its AV partnership strategy.
• Investors prioritizing a blend of growth and income should evaluate Alphabet for its established market leadership via Waymo, and TE Connectivity for its role as an essential supplier offering a relatively high dividend yield of 1.73%.
• Monitor key performance indicators such as the expansion of commercial AV operations into new cities, Waymo's weekly ride volume, and Lyft's ability to secure and scale AV partnerships to validate the investment theses presented by Goldman Sachs.