Question 1

What is automotive software in cars?

Accepted Answer

Automotive software refers to the embedded operating systems, connectivity platforms, and digital systems that run inside modern vehicles. Companies like BlackBerry's QNX division supply the core software that manages everything from safety systems to over-the-air updates. Today's vehicles are, in many meaningful ways, computers on wheels — requiring specialist software that automakers cannot realistically build themselves.

Question 2

What is a royalty backlog in tech investing?

Accepted Answer

A royalty backlog is the total value of future royalty payments a company is contractually owed but has not yet received. BlackBerry's QNX division holds a reported $950 million royalty backlog, which analysts use as a forward-looking indicator of sustained revenue demand. It signals that automakers are locked into long-term software agreements, providing a degree of earnings visibility.

Question 3

What does connected vehicle mean?

Accepted Answer

A connected vehicle is one that communicates with external networks — such as cloud services, fleet management systems, and navigation platforms — via internet connectivity. This connectivity enables features like over-the-air software updates and real-time data sharing, but also introduces cybersecurity risks. Managing and securing these connections is a core focus of the Automotive Software Revolution investment theme.

Question 4

Is the automotive software theme a good investment?

Accepted Answer

The theme targets a structural, multi-year shift in how vehicles are designed, operated, and protected — spanning embedded software, autonomous driving, and cybersecurity. However, it is growth-oriented, meaning constituent companies are often investing heavily in future capability rather than generating substantial profits today. Short-term volatility should be expected, and investors should consider their own financial circumstances before committing capital. All investments carry risk and you may lose money.

Question 5

What are the risks of investing in automotive technology stocks?

Accepted Answer

Key risks include slower-than-expected adoption of connected vehicle technologies, regulatory headwinds, and the inherent unpredictability of emerging technology markets. Many companies in this theme prioritise future growth over near-term profitability, which can make valuations sensitive to shifts in investor sentiment. The basket as a whole could decline in value, and past performance is not a guarantee of future returns.

Question 6

Is the automotive software theme right for beginner investors?

Accepted Answer

This theme is best suited to investors who believe in the long-term digitisation of the automotive sector and are comfortable with growth-oriented, higher-volatility exposure. It is not designed for those seeking stable dividend income or defensive returns. Beginners can access it via Nemo using fractional shares from as little as $1, though understanding the risks involved is essential before investing.

Question 7

How does this theme diversify my portfolio?

Accepted Answer

The Automotive Software Revolution theme spans several connected but distinct sectors — embedded operating systems, enterprise cybersecurity, fleet IoT, and autonomous driving platforms. That internal breadth provides some diversification across sub-sectors. However, performance is still influenced by a wide range of technology-specific factors, so it should be considered a complement to, rather than a replacement for, a broader investment portfolio.

Question 8

Top automotive software and connected vehicle companies to invest in?

Accepted Answer

According to Nemo's research, three key constituents in this theme are CrowdStrike Holdings (CRWD), Palo Alto Networks (PANW), and Mobileye Global (MBLY). CrowdStrike provides cloud-delivered endpoint security relevant to connected vehicle ecosystems, Palo Alto Networks offers comprehensive network security platforms, and Mobileye develops the advanced driver-assistance and self-driving software that forms the intelligence layer of modern vehicles.

Question 9

Why is cybersecurity part of an automotive investment theme?

Accepted Answer

When a vehicle connects to the internet — receiving software updates, communicating with cloud services, and integrating with fleet systems — it becomes vulnerable to cyber threats. Cybersecurity is therefore a structural requirement of the connected vehicle, not an optional add-on. Companies like CrowdStrike and Palo Alto Networks are core constituents of this theme precisely because securing automotive networks is now a mainstream investment consideration.

Question 10

What is Mobileye and why does it matter for autonomous driving?

Accepted Answer

Mobileye Global (MBLY) develops advanced driver-assistance systems and self-driving software, processing vast quantities of sensor data in real time to help vehicles understand their environment. It sits at the intersection of embedded automotive software and the autonomous driving megatrend, making it relevant to two of the fastest-growing areas of vehicle technology investment over the coming decade.

Question 11

Is now a good time to invest in connected vehicle stocks?

Accepted Answer

BlackBerry's $950 million QNX royalty backlog is one indicator that automotive software demand is structural and sustained rather than cyclical. Every major car manufacturer is now, in some meaningful sense, a technology company, driving long-term demand for software, security, and autonomous driving platforms. That said, the pace of adoption carries uncertainty, and timing any investment theme involves risk.

Question 12

How can I invest in automotive software stocks through Nemo?

Accepted Answer

Nemo is an ADGM-regulated thematic investment platform offering commission-free trading, AI-powered research tools, and fractional shares starting from just $1. The Automotive Software Revolution theme is available directly on the platform, giving investors in Africa and beyond a regulated, straightforward route to access connected vehicle stocks like CrowdStrike, Palo Alto Networks, and Mobileye without needing large amounts of capital.

The Car Is Now a Computer. Here's Who Profits.

The Car Is Now a Computer. Here's Who Profits.

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