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General Motors' (GM) Self-Driving Unit Gets SoftBank Funding

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General Motors Company (GM - Free Report) has announced that Tokyo, Japan-based SoftBank Group Corp will invest $2.25 billion in GM Cruise Holdings LLC, the autonomous-vehicle unit of the carmaker. This is one of the biggest investments in the self-driving car front. This huge investment, made through SoftBank’s $100-billion Vision Fund, will enable the auto giant to deploy self-driving vehicles in a big way.

In fact, many auto biggies, including Tesla, Inc. (TSLA - Free Report) , Waymo – the autonomous self-driving unit of Alphabet Inc. (GOOGL - Free Report) – and Uber Technologies Inc are making efforts to take advantage of early movers in the autonomous-vehicle space.

However, General Motors views electric and autonomous vehicles as the basis of future transport. The automaker is aiming to roll out self-driving vehicles since its $1billion acquisition of the startup, Cruise Automation, in early 2016. Presently, General Motors holds a sizable stake in Uber’s rival Lyft. The company believes that General Motors and SoftBank Vision Fund investments are expected to provide the capital that is required for the commercialization of autonomous vehicles, starting in 2019.

Currently, General Motors and Tesla carry a Zacks Rank #2 (Buy) while Alphabet has a Zacks Rank #3 (Hold). General Motors, Alphabet and Tesla have an expected long-term growth rate of 5.5%, 17.2% and 25%, respectively.

In a year’s time, shares of General Motors have outperformed the industry it belongs to. The stock has risen 24% against 1.7% loss recorded by the industry.



Another top-ranked stock in the auto space is Oshkosh Corporation (OSK - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Oshkosh has an expected long-term growth rate of 18.3%. Shares of the company have risen 11.4% over the past year.

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