Ford (F) to Invest $1 Billion in Argo AI Over Next 5 years

Ford Motor Co.F announced plans to invest around $1 billion over the next five years in Argo AI - an artificial intelligence company. The investment will be utilized for the development of a virtual driver system for Ford's autonomous vehicle, which is slated for launch in 2021.

Virtual driver system is machine-learning software which will act as the brain of autonomous vehicles. Ford's virtual driver system will be combined with the robotics talent and expertise of Argo AI. The virtual driver system produced from this joint initiative will feature in the Ford's Society of Automotive Engineers-rated (SAE) level 4 self-driving vehicle.

Fully autonomous SAE level 4-capable vehicle is designed for ride-hailing and ride-sharing services will be produced in high volumes. Toward this end, Ford is investing in or collaborating with four startups, namely, Velodyne, SAIPS, Nirenberg Neuroscience LLC and Civil Maps.

Ford focuses on the development of autonomous vehicle hardware platform and system integration. Argo AI will support Ford's autonomous vehicle software development, thus strengthening the commercialization of self-driven vehicles.

Agro AI will initially support Ford's autonomous vehicle development and production. Later, Agro AI will be offering its technology to other companies.

Meanwhile, Ford is rapidly working on bringing autonomous vehicle technology to the market. The company will add several driver-assist technologies to its vehicles over the next five years.

Ford Motor Company Price

Ford Motor Company Price | Ford Motor Company Quote

Price Performance

The Ford stock has underperformed the Zacks categorized Auto Manufacturers-Domestic industry in the last three months. This was due to a poor guidance for 2017 and President Donald Trump's public criticism of the company's plans to shift small car production to Mexico. Share price increased 3.8% over this period, while the industry saw a 14.3% gain.

Zacks Rank & Key Picks

Ford currently carries a Zacks Rank #3 (Hold).

Better-ranked companies in the auto space include Honda Motor Co., Ltd. HMC , Fox Factory Holding Corp FOXF and General Motors Company GM . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Fox Factory has an expected earnings growth rate of around 16.6% for the current year.

Honda has an expected earnings growth rate of around 27% for the current year, while the same for General Motors is pegged at 9.4%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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