As a regular subscriber to all of the leading car magazines, I am delighted to read about the technological advances taking place. Sure the gas mileage of many vehicles keeps rising, and the electrification of propulsion is a clear game-changer, but the most fascinating changes are taking place in every nook and cranny of today’s vehicles.

The cars you’ll drive in just a few years will have a range of systems that couldn’t even be dreamt half a decade ago. Many of those changes involve communications and information technologies.

How hot is this segment for investors? Well, shares of Harman International Industries, Inc. (NYSE: HAR) have surged 40% since I profiled the company five months ago.

Frankly, this stock may be getting ahead of itself, especially when you consider that the company’s cutting edge infotainment systems will still yield just 10-to-15% annual growth. I still love the investing angle, but am less enamored of this high-flying stock. Perhaps it’s time to broaden the scope with some other auto technology stocks. Here are three on my radar:

Mobileye N.V. (NYSE: MBLY)
This company, which focuses on vehicle piloting technologies, was one of the hottest initial public offerings of 2014. It has slumped badly in recent months, but is now on an upswing. Investors grew leery when it became apparent that Mobileye intended to raise more money in a secondary public offering, though with that event now completed, buyers have stepped back in.

Mobileye has secured a first-mover advantage in the field of advanced driver assist systems (ADAS), and is expected to play a key role in the development of autonomous vehicles.  Roughly 3% of all cars on the road to have ADAS features, such as blind-spot detection, lane departure warnings, automatic braking in collision scenarios, adaptive cruise control and other camera-based safety features. Analysts at Barclays think ADAS technology will be on 30% of all cars sold in three years, and they think Mobileye will be to cars what Microsoft Corp. (Nasdaq: MSFT) or Intel Corp. (Nasdaq: INTC) once were for computers.

The real charm of this business model: a focus on software, not hardware, which leads to gross margins exceeding 70%. Automakers love the company’s systems, due to a single-camera approach which is far less expensive than a dual camera approach.

#-ad_banner-#Prices for these systems are low enough to enable adoption in Ford and Chevy vehicles, not just Cadillacs or Lincolns. Cars equipped with ADAS gear are also starting to lead to insurance discounts. Moreover, the European Union has begun mandating some of these technologies, with the United States and Japan beginning to follow suit.

To be sure, shares are not inexpensive based on near-term projections. The company sports a $9 billion valuation, but won’t surpass $500 million in revenue before 2017. Still, both Barclays and Goldman Sachs see solid upside with price targets of $66 and $50, respectively.

On Semiconductor Corp. (Nasdaq: ONNN)
This company falls into the value spectrum of the “connected car” theme. ONNN makes a range of computer chips that are found throughout a new car (as well as other products). While other chip makers tend to experience booms and busts, this company has enough exposure to current and future technology trends to have a smoother growth trajectory. Shares trade at a reasonable 11 times projected 2016 earnings of around $1.25 a share.

Another sign of value: the company has bought back more than $1 billion in stock over the past four years. Free cash flow is set to move much higher, to around $400 million this year and almost $600 million by 2017, according to Merrill Lynch. Considering ONNN doesn’t currently pay dividends, it looks like more share buyback announcements are coming down the road.

Neonode, Inc. (Nasdaq: NEON)
This maker of optical touch solutions is at the other end of the spectrum: it’s highly speculative, yet has a lot of potential upside. The key for small, unproven tech companies such as Neonode is to find bigger, well-heeled partners. Neonode recently announced a development agreement with Sweden’s Autoliv, a leading global provider of automotive safety systems.

Neonode aims to boost safety by having its near-field sensing technology used on a range of dashboard features. Drivers will be more capable of adjusting various settings while keeping their eyes on the road.  (Neonode’s technology is also applicable to printers, computers, smart phones and wearable devices.)

Risks To Consider: Automakers are feeling flush these days, which is leading the industry to spend freely on new technologies. But an auto industry downturn might lead to a reduction in development of advanced technologies, which would dim the growth prospects for these companies.

Action To Take –> With each passing year, we are hearing about newly-envisioned automotive technologies. As each new system comes on the industry’s radar, these firms look poised to benefit. Mobileye, On Semiconductor and Neonode represent three dynamic ways to play the connected car theme.   

The “connected car” is a game-changing idea — a concept that fits perfectly with StreetAuthority’s premium newsletter on the subject Game-Changing Stocks. This newsletter is devoted to uncovering the next big ideas that can move the markets — and potentially change the world. For more information about “The Hottest Investment Opportunities For 2015,” click here.