Here’s the Best Way to Profit From Autonomous Cars

Mobileye (MBLY) is a major camera and sensor supplier to approximately 90 percent of the automotive industry, and is aggressively focusing on competing in the driverless car segment. The company is using its camera and sensors to gather mapping data from cars, upload it to the cloud, and then crowdsource it to different vehicles. This service is known as Mobileye’s Road Experience management ("REM").

The driverless car market is rising at a rapid pace, and several giant companies are making moves into the automotive industry.
Moreover, it is predicted that the driverless car market will reach $42 billion in the next 10 years. As per IHS Automotive’s estimates, 10 percent of light vehicles sold by 2035 will be entirely driverless. Regardless of optimistic prospects, Mobileye has moved higher throughout the last few months. While the stock’s valuation may be a bit stretched, Mobileye can continue moving higher.

Most recently, Mobileye publicized that it has teamed up with Intel (INTC) and BMW, and due to this the company’s share ascended. The company has also planned to develop and deliver vehicles by 2021. Mobileye will gain huge benefits due to its smart partnership decision with Intel and BMW, as both the companies are well established.

On the other hand, BMW’s alliance with Mobileye and Intel is the next most significant step in the direction of bringing fully automated driving technology to the road. Furthermore, the technology developed will be used in the iNext, which is intended to replace 7-series sedan as BMW’s flagship model, and turn out to be a basis for convoys of fully autonomous vehicles.

Recently, a fatal accident caused by a Tesla (TSLA) running on the Autopilot feature has received media attention. Despite high and advanced technology in new cars, the Tesla accident signifies that maybe the market is rushing too fast into this new technology. However, Tesla’s vehicle was operating on a testing mode, and it can be certainly said that companies will now work harder on safety features.


It is obvious that the autonomous car market is on the rise and will grow exponentially in the years to come. Mobileye is the only pure play autonomous-car company that investors can currently buy, which is probably why the stock’s valuation is stretched. However, long-term investors can still benefit from it as the stock will move higher as the market grows. Investors should ideally look for a pullback before initiating a position.
Published on Jul 26, 2016
By Prudent Investor

Copyrighted 2020. Content published with author's permission.

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