Discussion of driverless cars is becoming more commonplace every day. And though the industry still faces plenty of hurdles -- from both legislative and safety perspectives -- before it can truly displace today's human-driven model, early investors stand to be handsomely rewarded from the trend.

But finding the most promising self-driving-vehicle stocks is easier said than done. So we asked three top Motley Fool contributors to each choose a driverless-car stock they believe you should be watching at the start of 2019. Here's why they chose Alphabet (GOOG 0.66%) (GOOGL 0.49%), NXP Semiconductors (NXPI 2.19%), and General Motors (GM -1.42%).

A driverless Jaguar with the Waymo logo


Alphabet's Waymo is quickly going mainstream

Steve Symington (Alphabet): Earlier this week, Waymo, the autonomous-vehicle subsidiary of Google parent Alphabet, announced plans to retrofit a 200,000-square-foot facility in Michigan, effectively creating "the world's first factory 100% dedicated to mass production of L4 [level 4] autonomous vehicles."

Of course, Michigan workers can be happy the plant will create up to 400 jobs in the area, from engineers to operations personnel to fleet coordinators. But most exciting for investors is that this appears to be a sign Waymo is taking more control over its production capabilities, as it works to commercialize its business.

The news comes hot on the heels of Waymo launching its first self-driving taxi service in Arizona last month. Assuming it can continue to scale its business and hone its self-driving-vehicle technology, some analysts already believe Waymo is poised to become a $100 billion business over the next decade -- a hefty chunk of incremental change even for Alphabet, given that its market cap is currently around $750 billion. So even putting aside the incredible business Alphabet has already built through its core Google operations, I think investors who bet on the company as a leader in the driverless-car space could enjoy massive gains in the coming years.

Check out the latest Alphabet earnings call transcript.

Don't call it a comeback -- NXP never left

Anders Bylund (NXP Semiconductors): Automotive computing giant NXP Semiconductors is navigating some stormy seas at the moment. The proposed merger with larger chipmaking peer Qualcomm (QCOM 2.01%) fell apart, and car sales in China have been slow for a few months. You could argue that these two headwinds are related, since international trade disputes arguably triggered both of them.

Investors sent NXP's stock straight to the bargain bin when the Qualcomm deal failed, and that hole has only been dug deeper over the last six months.

But I think that's a big mistake. NXP isn't going away, and is probably worth every penny of the $44 billion that Qualcomm had been prepared to pay for it. Trading at a current market cap of $23 billion, with $25 billion of enterprise value, it's a steal in my book.

Despite political headwinds and unpredictable currency exchange trends, NXP is delivering modest revenue growth these days. According to a Strategy Analytics report quoted in NXP's recent investor-day presentation, the company is neck and neck with Japanese rival Renesas in the automotive-chip market; together, these two companies hold a 59% share of that market. And car processors accounted for 40% of NXP's total sales in the third quarter.

Most of that revenue may come from infotainment systems and engine controllers right now, but that will change quickly. Here's how NXP's CEO Rick Clemmer explained this at an industry conference in November:

If you look at automotive, our position, we're really focused on autonomous driving. We're designed in on all of the 10 top auto companies' radar platform[s] that will be deployed. We look at autonomous driving through Level 3 as being the significant growth driver over the next five to seven years.

A fully autonomous car needs at least $900 of computing components aboard, in order to read the traffic conditions and use them to deliver a safe and efficient self-driving experience. Level 3 self-driving cars can get away with $600 of these sensors and processors, and current Level 1 or 2 assisted-driving vehicles don't need more than $150 of computing tools. If self-driving cars are going mainstream in the near future and NXP can hold on to its massive market share, we're looking at a huge long-term growth opportunity.

Like I said, NXP's stock is incredibly cheap right now, and that's a big mistake. I'd recommend taking advantage of NXP's low share prices, because the sale won't last forever.

Check out the latest NXP Semiconductors earnings call transcript.

An oldie but a goodie

Chris Neiger (General Motors): Technology companies get most of the attention for what they're doing in this autonomous-vehicle (AV) market, but investors would be wise not to overlook GM's plans for self-driving cars.

The automotive stalwart began its AV push in 2016 when GM purchased Cruise Automation, a company that makes self-driving-vehicle software. Since then, Cruise has grown from a few dozen employees to more than 1,000. Cruise Automation says it'll start mass-producing a fully self-driving vehicle -- sans steering wheel and pedals -- sometime this year. Additionally, GM is working on an AV ride-hailing service that's expected to launch later this year.

But GM isn't going it alone in the AV market. Late last year the company forged a new partnership with Honda (HMC 1.86%) to codevelop an entirely new self-driving car from the ground up. Honda said it will invest $2.75 billion in GM's Cruise over the next 12 years. GM has also received funding for its AV ambitions from Softbank Group, which invested $2.25 billion in Cruise last year.

Aside from the investments, GM has also indicated that AVs would play a more significant part in the company when it announced some restructuring and layoffs at the end of 2018. The company said among its new changes would be to allocate more resources to electric and autonomous vehicles.

GM's Cruise was valued at about $14.6 billion after Honda's investment just a few months ago. And with GM poised to launch an AV service this year and the company already working on a fully self-driving vehicle, GM's Cruise is well-positioned to grow its value even more and expand its lead in the nascent self-driving-vehicle market.

Check out the latest GM earnings call transcript.

Strap in and enjoy the ride

We're still in the early stages for driverless cars, so none of us can guarantee that these three stocks will go on to beat the market. But given their central roles and industry leadership today, we believe Alphabet, NXP, and GM are on the road to doing exactly that. And we think patient investors who put their money to work accordingly will be more than pleased with the decision.