Intel plans to take public its self-driving unit Mobileye – The Average Joe

    Intel plans to take public its self-driving unit Mobileye

    Victor Lei β€” Head of Research

    December 8, 2021

    intel

    December 8, 2021

    Intel (NASDAQ:INTC) is planning to take its Mobileye unit public β€” a provider of autonomous vehicle and driver assistance software.

    What’s the big deal? Mobileye was once a public company β€” until Intel purchased it in 2017. Since being acquired:

    • Mobileye’s sales tripled while Intel’s is up ~24%.
    • Intel’s stock price is only up 48% β€” underperforming the market.

    Investors are likely undervaluing Mobileye’s growing business β€” pulled down by Intel’s struggling business.

    Lose the baggage: Intel β€” once the golden standard in the chip business β€” underachieved for many years. Its advanced computer chips fell behind other advanced chip makers, like AMD (NASDAQ:AMD) β€” steadily losing market share.

    • Despite record year for computer chip demand, Intel’s sales have been flat β€” its stock only up 7% this year.
    • Benchmark: The iShares Semiconductor ETF (NASDAQ:SOXX) is up 46% this year.

    WSJ reports Mobileye could be valued at $50B when it goes public β€” over 3x the $15B Intel paid.

    • With $326M in sales last quarter, Mobileye makes up less than 2% of Intel’s $19B sales.
    • If it goes public at this price, Mobileye would be worth nearly ΒΌ of Intel.

    Change the narrative: Mobileye dominates the advanced driver-assistance systems market (i.e. sensors/cameras to detect objects) β€” helping people drive and park better.

    While not at self-driving level yet β€” Mobileye is a top contender to provide self-driving software to the 25 carmakers it works with.

    • By listing it as its own public company, investors could see it as an exciting self-driving tech company.
    • Competitor, Aurora Innovation (NASDAQ:AUR) β€” having generated its first $56M in sales in the recent quarter β€” is already valued at $13B.

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