Intel plans to take public its self-driving unit Mobileye

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

What’s the big deal? Mobileye was once a public company — 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% — underperforming the market.

Investors are likely undervaluing Mobileye’s growing business — pulled down by Intel’s struggling business.

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

• Despite record year for computer chip demand, Intel’s sales have been flat — 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 — 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 ¼ of Intel.

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

While not at self-driving level yet — 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) — having generated its first $56M in sales in the recent quarter — is already valued at $13B.