Wall Street has collectively decided that a software firm called Mobileye now stands at the vanguard of firms investors should look to to invest in the self-driving car revolution.
Mobileye was the largest-ever IPO by an Israeli firm, raising $890 million at a valuation of over $7.5 billion, according to the Times Of Israel. Shares are up 12% since its August 1, 2014 debut, and climbed 8% Tuesday.
Barclays’ Brian Johnson called it “the only ‘pure play’ ” on what he says is a secular shift in the automotive industry toward more digitally reinforced driving safety standards.
“Just as PCs and smartphones transformed computing, software will change the way we drive, and MBLY will likely be at the forefront of that change,” Johnson said in a note this week. “In our view, MBLY stock offers considerable upside potential given the company’s strong competitive position in the advanced driver assistance systems (ADAS) and semi-autonomous markets, which should drive a 45% revenue [compound annual growth rate] through 2020 (largely from ADAS) and a 14% CAGR from 2020-2025 (as semi-autonomous kicks in at scale).”
But Mobileye’s technology does not yet render the driver obsolete. Quite the opposite, it turns out. Mobileye-based devices are mounted on a driver’s dashboard. The software ‘interprets’ a video feed in real-time to detect anything in the car’s path, then calculates a driver’s distance from it, from pedestrians at a stoplight…
To other vehicles on the highway.
It then sends out warning beeps, as well as visual signals, that there’s trouble ahead.
As a result, unlike fully autonomous vehicles, it’s still up to the driver to hit the brakes. Here’s a demonstration involving a woman checking her cellphone.
A truck has stopped ahead, which she hasn’t noticed, so Mobileye steps in:
Here’s the full clip in all its melodrama. The beeps start at 1:38.
As Morgan Stanley’s Ravi Shanker notes, one reason the market is so bullish on assisted driving is the potential for the technology to become virtually mandated in developed markets.
“Starting in 2014, Euro NCAP (New Car Assessment Program) already requires that a new vehicle must have active safety installed to qualify for the fifth star of a 5-star crash safety ratings — For more information read the original article here.