What: Shares of Mobileye (NYSE:MBLY) soared on Thursday following a Bloomberg report stating that the company has teamed up with Intel (NASDAQ:INTC) to develop self-driving car technology for BMW (OTC:BAMXF). At 11:45 a.m. EDT, the stock was up about 12.5%.
So what: Mobileye has benefited from the increasing penetration of advanced driver assistance systems in automobiles. The company can already claim BMW and Tesla Motors as clients, and it generated $241 million of revenue in 2015. Meanwhile, Intel is focusing on diversifying its business away from the PC, a market that has suffered from a prolonged slump in recent years.
Details regarding the partnership are scarce at the moment, but it likely represents a major push by Intel to get its chips inside of automobiles. Competition is heating up in the battle to power the eventual self-driving car, with both graphics specialist NVIDIA and NXP Semiconductors (NASDAQ:NXPI) offering self-driving platforms of their own. NVIDIA launched the DRIVE PX system in early 2015, while NXP announced BlueBox earlier this year.
BMW plans to hold a press conference later today, which will provide more details about the partnership.
Now what: Mobileye is already a leader in the advanced driver assistance system market, supplying around 90% of the world's top automakers with cameras and software. The company has less of a presence in other areas, like powering infotainment systems, which leaves it well behind NXP, the largest supplier of semiconductors to the automotive industry.
The scope of the partnership is still unknown, so investors pushing up the stock may be getting ahead of themselves. But teaming up with Intel as it pushes to expand into new areas will likely prove to be a positive for Mobileye.