MBLY - Mobileye: Top 2024 Pick After Stock Decline

2024-02-05 11:14:13 ET

Summary

• Mobileye Global Inc. has seen a strong stock decline due to a mostly one quarter inventory digestion, but the long-term potential remains unchanged, with 2023 design wins worth over 3x revenue.
• Specifically, the automotive industry will experience its own cell phone to smartphone moment starting in the next several years. An L4 system increases Mobileye's revenue per vehicle up to 100x.
• Despite a pivot away from operating robotaxi networks, Mobileye Global could still earn high-margin, recurring licensing revenue from both robotaxis and consumer AVs.
• Mobileye could be a top pick for investors looking for the next major semiconductor growth opportunity.

Investment Thesis

Mobileye Global Inc. ( MBLY ), the definite leader in advanced driver-assistance systems ((ADAS)), is the Nvidia ( NVDA ) of the automotive industry. It is quickly becoming a top pick for 2024 after the recent decline in its stock price. The decline is purely driven by near-term dynamics, a one-time mostly Q1 inventory correction, with revenue already expected to double in Q2....

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