Tesla’s recent 7% share price drop after stronger than expected Q2 deliveries has put the spotlight back on how much of its US$1.6t valuation depends on future autonomy and robotaxi potential, rather than short term sales. For investors, that kind of “sell the news” reaction is a reminder that headlines around self driving technology can quickly reshape expectations. This article looks at 3 stocks exposed to the same autonomy theme, all drawn from an Autonomous Vehicle Technology screener, to help you think through where the Tesla news might create opportunity or add risk to your portfolio.

Richardson Electronics (RELL)

Overview: Richardson Electronics is a US based supplier of engineered power, microwave and display solutions, providing everything from electron tubes and RF components used in semiconductor tools and radar, to custom medical and industrial displays and replacement parts for CT and MRI systems across energy, healthcare, transportation and other industrial markets.

Operations: Richardson Electronics generates revenue primarily from its Canvys custom display solutions business at about US$34.5 million and its Green Energy Solutions unit at about US$29.7 million. It also reports a US$150.1 million segment adjustment that reflects consolidation across its operating segments.

Market Cap: US$241.8 million

For investors watching Tesla’s autonomy headlines, Richardson Electronics offers a very different way to get exposure to the hardware side of advanced driver assistance and electrified transport, supplying the power and RF components that sit behind sensors, radar and high voltage systems rather than focusing directly on one carmaker’s software narrative. The business is linking that expertise into green energy storage, data centers and medical imaging, while analyst forecasts point to faster earnings growth than revenue as higher margin products gain traction. Against that, the stock’s high P/E, reliance on project based Green Energy Solutions work and use of external borrowing mean execution and balance sheet discipline matter a lot. The key question is whether those risks are adequately reflected in today’s price or not.

Richardson Electronics looks like an earnings story waiting to be priced, with higher margin products shifting the mix while risks sit in the background. Get the full context in the analyst forecasts for Richardson Electronics

AXT (AXTI)

Overview: AXT is a Fremont based semiconductor company that makes high performance compound substrates like indium phosphide, gallium arsenide and germanium. These sit at the base of chips used in data center optics, 5G, sensors, lidar and other applications that connect AI data centers and autonomous vehicles to the physical world.

Operations: AXT generates all of its US$95.9 million in revenue from semiconductor equipment and services, with sales spread across China, Japan, Taiwan, Europe, North America and the wider Asia Pacific region.

Market Cap: US$3.6b

AXT offers exposure to Tesla style autonomy and the broader AI build out without focusing on a single automaker, because its substrates feed into lidar, optics and sensors that multiple customers use across data centers and advanced driver assistance systems. The company is investing heavily in indium phosphide capacity as customers discuss very large step ups in demand. However, export permits, reliance on Chinese clients and currently low margins and losses contribute to execution risk. In addition, recent equity raises, dilution and insider selling mean this is a high potential, higher risk substrate supplier that may appeal to investors who understand both the AI and autonomy opportunity and the funding and regulatory constraints around it.

AXT’s accelerating indium phosphide push and global sensor reach could be masking a far more interesting risk reward profile than headlines suggest, and the full story sits inside the 2 key rewards and 3 important warning signs (2 are major!)

Mercury Systems (MRCY)

Overview: Mercury Systems is a US based defense technology company that supplies high performance computing, sensor and electronic warfare hardware used in radar, electronic intelligence, autonomous platforms and other mission critical aerospace and defense systems.

Operations: Mercury Systems generates essentially all of its US$966.9 million in revenue from its Aerospace and Defense segment, with most sales in the United States and a smaller contribution from Europe.

Market Cap: US$7.6b

Mercury Systems gives you exposure to the same autonomy and high compute theme that drives interest in companies such as Tesla. It does so from the defense and aerospace side, where secure processing, radar and electronic warfare payloads are associated with heavier investment and longer contract cycles. The company has reported record bookings, a growing backlog and improved margins, indicating that operational changes and higher value contracts are starting to flow through, while it is still reporting losses and working through older, lower margin programs. With the stock trading at a premium P/S multiple and analysts expecting a shift to profitability over the next few years, the key question is how much of that potential margin recovery and defense digitization story is already reflected in the current price.

Mercury Systems’ push into high value radar and electronic warfare computing could be the missing piece in your autonomy thesis, and the real twist sits inside the analysis report for Mercury Systems

The three stocks covered here are only a starting point, and the full Autonomous Vehicle Technology screener includes 45 more companies with equally compelling autonomous vehicle stories that are not yet on most investors’ radar. Use Simply Wall St to identify and analyze the specific catalysts, financial health signals and autonomy driven narratives that matter to you so you can research opportunities in this space.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.