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HomeMarketMobileye, Nvidia, Uber Stocks Are Winners in a Self-Driving World

Mobileye, Nvidia, Uber Stocks Are Winners in a Self-Driving World

Mobileye makes optical vision systems and software that help cars ‘see.’

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Courtesy of Mobileye, an Intel Company

Wall Street has a new favorite self-driving car stock:
Mobileye
—and it isn’t the only company to benefit as vehicles gain autonomy.

On Thursday, New Street Research analyst Pierre Ferragu launched coverage of
Mobileye
(ticker: MBLY) stock with a Buy rating and $42 price target. It closed Wednesday at $28.51.

Mobileye
makes optical vision systems and software that help cars ‘see’—enabling advanced driver assistance systems, or ADAS. As driver assistance hardware and software gets better, cars should be able to drive themselves.

That’s down the road. For now, Mobileye’s products enable systems such as adaptive cruise control and emergency braking. They are on dozens of production models and 2023 sales are expected to come in at $2.2 billion, up from $1.8 billion in 2022.

Mobileye is the latest stock to buy into the self-driving car race. The company priced its IPO at $21 a share in late October.
Intel
(INTC) still owns a majority of it.

Ferragu expects the advanced driver assistance industry to grow to about $7 billion by 2025 and $27 billion by 2030. Mobileye is competing for a piece of that pie. He projects Mobileye sales will hit $3.9 billion by 2025. “Mobileye likely remains market leader ex-
Tesla,
” wrote the analyst in his launch report.

Tesla
(TSLA) has its own internally developed cameras and software it uses for driver assistance features.
Tesla
‘s basic offering is called Auto Pilot. It calls its most advanced features Full Self Driving, for which it charges car buyers $15,000.

Ferragu covers a mix of technology and automotive companies. He rates Tesla shares Buy and has the highest price target on the Street for Elon Musk’s company at $530 a share.

He rates shares of light detection and ranging (lidar) maker
Aeva Technologies
(AEVA) Buy and has a $3.60-per-share price target for that stock, according to FactSet. Lidar is essentially laser-based radar and is used as another set of eyes for a self-driving car. Lidar technology is still relatively expensive and its adoption into mass-market cars is just beginning.

Nvidia
(NVDA) and
Uber Technologies
(UBER) are two other stocks Ferragu says are affected by self-driving technologies.
Uber
can use them to drive down costs.

Nvidia
processors are needed to compute all the data coming in through camera and lidar sensors. Ferragu rates Nvidia shares Buy and has a $220 price target for that stock. His rating for Uber stock is Buy and his price target is $50 a share.

Ferragu is the latest analyst to launch coverage of Mobileye with a bullish rating. Now 10 out of 12, or 83%, of analysts covering the stock rate the shares Buy. The average Buy-rating ratio for stocks in the
S&P 500
is about 58%.

The average analyst price target is about $41 a share, very close to Ferragu’s target. Mobileye shares closed at $28.1 on Wednesday.

Mobileye stock is down 1.2% in premarket trading, despite the bullish call. Shares jumped 3.9% Wednesday though as the S&P 500 rallied 3.1% and the
Nasdaq Composite
added 4.4%.

Credit: marketwatch.com

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