Tesla (NASDAQ:TSLA) diehards can point to several examples as to why they’re bullish on the company. They may mention CEO Elon Musk’s passion for creating an all-electric automotive company or the company’s approach to implementing innovative technologies in its cars. They might also point to the fact that Tesla has finally made electric cars sexy or has equipped them with a mileage range that rivals traditional vehicles.
Or, perhaps they’re excited about the Tesla’s potential to bring more semi-autonomous features to its vehicles, and are anticipating the eventual rollout of fully autonomous features.
But Tesla isn’t the only company betting on new transportation technologies or disrupting existing markets. General Motors (NYSE:GM) and Apple (NASDAQ:AAPL) are both using innovation to outpace their competitors — and both are worth a close look from investors.
Slow and steady may win the race
If you’re impressed with Tesla’s integration of semi-autonomous features into its vehicles, then you need to see what GM is already doing. The company bought driverless car tech company Cruise Automation for $1 billion in 2016, and since then GM has begun integrating the acquired tech into some of its vehicles.
But what’s really impressive is that GM debuted its fully autonomous Cruise AV vehicle earlier this year — devoid of a steering wheel and pedals — which it plans to launch next year. The vehicle won’t be available for sale but will instead be used as part of a ride-sharing program.
The Cruise AV might sound like a gimmick to those who haven’t been keeping up with GM’s innovation, but keep in mind that the vehicle is the first mass-produced fully autonomous vehicle. GM’s already built 130 of them in its factory, with plans to make more.
If all of that weren’t enough to get the attention of driverless car enthusiasts, then consider that GM recently received a $2.25 billion investment from Softbank Vision Fund to help bring its driverless car dreams more quickly into reality. It’s part of a seven-year agreement that will help fuel GM’s driverless car dominance.
GM’s moves in the driverless car space have already led analysts at RBC Capital to value GM’s Cruise Automation at $43 billion.
A fellow disruptor
If you’re already bullish on Tesla, then you clearly have a bent for disruptive companies. While some bears think Apple’s best days are behind it, the company has continued to defy the pessimists.
Consider this headline from CNBC in 2014: “This Chart Says Apple’s In Big Trouble: Trader.” One excerpt from the article noted:
Apple investors and tech lovers alike are eagerly awaiting the company’s product event on Tuesday, at which Apple is expected to announce the iPhone 6 and perhaps also a smartwatch. But if past is prologue, then Apple bulls will soon run into tough times, contends trader Dan Nathan of RiskReversal.com.
Despite Nathan’s prediction of “tough times” ahead, Apple’s share price has gained 94% since the article was published. Since that time, it’s also launched several new versions of the iPhone, mostly with smashing success. It also launched its first smartwatch shortly after the article’s publication, and is now the undisputed wearable tech leader. Apple has also built its services segment into one of its fastest-growing business.
If investors are looking for a company that knows how to continually disrupt markets and prove people wrong, Apple is still a good bet.
What makes Apple even more attractive is that with all its success, shares are trading at just 18 times the organization’s trailing earnings. That’s much less than tech industry’s current average trailing price to earnings ratio of 31, which means you can get all of Apple’s disruptive tendencies at a bargain price.
It’s easy to think that the most disruptive and innovative companies have to be relatively young like Tesla. But investors should consider that both GM and Apple are still transforming their respective industries and will likely continue doing so for many more years. More importantly, if investors are looking for companies that have much safer and stable businesses than Tesla, then GM and Apple are no-brainers.