Call it a self-driving boost. Stock prices for car rental companies Avis Budget Group, Inc. (CAR) and Hertz Global Holdings, Inc. (HTZ) shot up after reports that technology behemoths Apple Inc. (AAPL) and Alphabet Inc. (GOOG) subsidiary Waymo had signed deals with them to develop a fleet of self-driving cars. Hertz saw its stock price rise 15.3% to a peak of $10.93 on news of its deal with Apple, while Avis Budget Group witnessed an increase of 16.1% after its Waymo deal. Investors see the emerging contours of a market for electric and self-driving cars.

"[Rental car companies] have experience in financing, buying, and reselling large numbers of vehicles, and have the real estate and physical urban presence to maintain, clean, and potentially (in an electric car context) run fleets," wrote Goldman Sachs analyst Stefan Burgstaller. Another analyst, Credit Suisse's Anjaneya Singh, wrote that rental car companies could reinvent themselves as fleet owners and operators for self-driving cars and added that such agreements could spur investment from long-term investors because it means that rental car companies will survive disruption from self-driving cars. (See also: Hertz, Avis Link With Apple, Google on Self-Driving.)

The spike was especially welcome for Avis and Hertz. Stock prices for both companies have been on a downward slide this year after a slew of disappointing earnings due to industry headwinds. For example, Avis stock had dropped by as much as 42.1% in May from its start price at the beginning of this year. Even as booking volumes increased, a combination of pricing pressure from ride-sharing startups coupled with higher cost of operations (due to low prices for used cars, which form a bulk of the fleet) resulted in disappointing earnings for the car rental company. Despite the positive news on self-driving deals, stock prices for car rental companies may not be out of the woods yet. Avis stock was down 8% by the end of yesterday, and Hertz shares ended the day down 2%. 

Analysts, however, are counting on the long-term future for these companies. "With the right positioning, we believe the next ten years will present a dynamic environment that could prove rental car companies to be either valuable fleet operators or vestigal business models," wrote Burgstaller. (See also: Time to Buy Hertz at an 8-Year Low?