2 Stocks That Could Soar, Driven by Billions From Software Innovations. Hint: They Aren't Even Tech Stocks.

Rivian’s software-and-services ramp is already visible in Q1 2026: software/services revenue rose 49% to $473M, with software gross profit of $181M vs $62M for automotive—supporting a path to higher-margin profitability. For General Motors, OnStar and Super Cruise subscriptions are projected to grow realized revenue to $3.1B and deferred revenue to $7.5B in 2026 (from $2.7B realized and $5.4B deferred last year), with GM citing connected-business gross margins that could approach ~70%. The article argues these higher-margin recurring revenue models could materially re-rate automaker valuations, with early renewal evidence showing at least 30% of expiring Super Cruise subscribers renewed in 2025.

Analysis

GM’s setup is less about near-term revenue and more about narrative duration: recurring software cash flows can justify a higher terminal multiple if they become visible enough to dilute the cyclical “metal-bender” discount. The key market mechanism is mix shift — every incremental dollar of software gross profit is far more valuable than wholesale profit, so investors should focus on attach rate, renewal, and deferred-revenue conversion rather than headline sales growth.

RIVN’s VW link is strategically valuable because it de-risks the platform by outsourcing part of the R&D burden and turning the architecture into a licensing asset. The second-order effect is competitive: if VW can reuse the stack across multiple badges, other legacy OEMs will pressure suppliers and in-house teams to adopt similar SDV architectures, which is structurally negative for laggards like LCID that lack scale to monetize software before cash burn re-accelerates.

The consensus may be underestimating saturation risk. Auto software is attractive in theory, but consumer willingness to pay recurring fees is fragile, especially in the used-car channel where a pre-installed feature can become a subscription cancellation event rather than an annuity. The falsifiers are straightforward over 1-3 months: renewals below expectations, weaker deferred-revenue growth than management guides, or any sign that bundled subscriptions are being used to mask low paid conversion; over 6-18 months, the thesis breaks if software gross profit stays a small share of total auto gross profit and does not re-rate the equity multiple.

Key Decisions for Investors

• Long GM / short LCID for 3-6 months: GM has a credible path to recurring-margin expansion while LCID remains a pure cash-burn story with little evidence of monetizable software economics; stop if GM subscription renewal/attach rates disappoint or LCID secures a meaningful OEM software partnership.
• Add RIVN on weakness only, 1-3 month horizon: treat VW milestones as a funding backstop and optionality on SDV licensing; risk/reward is attractive if the market remains focused on delivery volatility rather than software gross profit conversion. Exit if partner payments stall or gross profit turns negative again.
• Use GM Jan-2027 calls or call spreads for a 12-18 month re-rating trade: the catalyst is not quarterly beats but repeated evidence that software becomes a meaningful share of consolidated gross profit; downside is capped if a spread is used, but the trade only works if renewal data stays firm.
• Avoid extrapolating the software narrative into the entire auto complex; if looking for a relative short, favor LCID over GM/RIVN because its valuation is more sensitive to any disappointment in monetization and capital raises.