Mobileye Global
has the dubious distinction of being the worst-performing tech stock in the early weeks of 2024, but CEO Amnon Shashua is shrugging it off. He says the company is doing just fine when it comes to what matters most: gaining traction for its autonomous- and assisted-driving technology.
The reason Mobileye shares are down almost 30% since the end of December is no mystery. Last week, the company warned that it had discovered in discussions with customers that they had built up excessive inventory of Mobileye gear after a pandemic-era supply crunch led to overordering.
As a result, Mobileye now expects first-quarter revenue will be down 50% from a year earlier. For the rest of the year, the company sees revenue flat to up by mid single-digits percentages from a year earlier.
Shashua has been having a big week at CES, delivering an hour-long media briefing and hosting a busy booth in the West Hall of the Las Vegas Convention Center, with multiple Mobileye-equipped cars on display. The biggest news, announced a few day ago, is that the company has signed “a series of production design wins” from “a major Western auto maker,” that will include 17 gasoline-powered and electric vehicles to roll out in 2026.
In an interview with Barron’s, Shashua shrugged off the earnings warning as a one-quarter inventory blip with no lasting impact on the business.
“The vision is becoming a reality,” said Shashua, the founder of the company, which grew out of his graduate school work on machine vision. Mobileye is built on the idea that there will be widespread acceptance of the company’s technology to make driving safer, and eventually to make cars autonomous.
Based in Jerusalem, Mobileye went public in 2014 before selling itself to Intel for $15.3 billion in 2017. The company returned to the public market late last year at $21 a share, opened for trading at $26.71, and now sits at $30.84. Intel continues to own most of the stock.
Shashua described Mobileye’s entry-level systems, used for driver assistance like collision avoidance and lane keeping, as “hands on, eyes on.” It has been gaining traction for Supervision, a system that provides more autonomy, allowing some “hands off, eyes on” driving, in particular on highways.
A step above that is Chauffeur, which provides a higher level of autonomy, and allows for “hands off, eyes off” driving, making it possible for the driver to do other things in the car. The company also offers a system for full autonomy for robotaxis and similar applications, simply called Drive.
Investors have been closely tracking Mobileye’s relationship with Zeekr, a brand owned by China-based Geely Automotive. About 160,000 Zeekr’s shipped in 2023 with Mobileye’s Supervision system.
But many more Supervision and Chauffeur-equipped cars are coming, with wins from Polestar, Volvo, India’s Mahindra,
Porsche,
and FAW. Including the 17 car models from the unidentified Western auto maker, there are 30 models with advanced Mobileye systems in some phase of development.
Shashua’s view is that the growing list of design wins means far more to the future of the company than a short-term issue with customers having excessive inventories of hardware for entry-level systems. The nature of the business, he said, is that when Mobileye gets a design win, there are two years or so of development, but the vehicles stay in production for seven years or more.
Eye on the prize. “This is not a market share erosion story,” Shashua said.
The company expects to get a green light to identify the new Western auto maker in the next month or two, he said.
Write to Eric J. Savitz at [email protected]
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