Amazon (AMZN)-backed Aurora has announced that it will be deploying its self-driving vehicles for testing and development in Texas.
A fleet of minivans will launch immediately followed by a deployment of trucks at the end of the year. Aurora plans to use Texas’ commercial driving routes with Class 8 trucks and Fiat Chrysler Pacifica minivans.
In a July 20 Medium post, Aurora stated, “Texas’ role as a crucial state in the movement of goods makes it a natural place for Aurora’s expanded testing. With more public road miles than any other state, Texas understands that self-driving technology will have a critical safety impact for those who drive on its roads.”
Last year, the company raised $530 million in investments from T. Rowe Price Group Inc (TROW), Sequoia Capital, and Amazon, which brought Aurora a $2.5 billion valuation. Aurora launched as a startup in 2017 with a self-driving stack that provided the backend brains to power a vehicle using combined hardware and software. Aurora has kept most of its technical developments under wraps but the company is expected to use cutting-edge sensors called LIDAR following its acquisition last year of Blackmore, which is known as an industry leader in the technology.
Amazon has made other moves to expand its e-commerce presence on the road with self-autonomous vehicles. On June 26, the online retail giant purchased self-driving startup Zoox for nearly $1.2 billion.
Baird analyst Colin Sebastian said on June 26 that the Zoox acquisition accelerates Amazon’s deployment of autonomous vehicles while saving the company billions of dollars in R&D and logistics costs. He stated that it is a “big deal” and could be a “game-changing” combination with massive option value. The analyst reiterated a Buy rating on the stock on July 7 and lifted his price target from $2,750 to $3,300 implying 3% upside potential.
Similarly, Monness analyst Brian White maintained a Buy rating on Amazon on June 26 saying, “Amazon continues to invest in next-gen tech to expand its reach as evidenced by last week’s agreement to acquire Zoox in the world of autonomous vehicles.” He raised the price target from $2,800 to $3,500 (31% upside potential).
Overall, 36 analysts assign Buy ratings, 2 Hold ratings, and 1 Sell rating, giving AMZN a Strong Buy Street consensus. The average analyst price target stands at $3057.06 suggesting 4% downside potential, with shares already up 15% year-to-date. (See Amazon’s stock analysis on TipRanks).
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