Intel Stock Analysis - Mobileye Deal

TL;DR

Intel is considering bringing its Mobileye business public, which creates technology for autonomous vehicles and driver safety, potentially giving a big boost to the company and its investors.

Transcript

hi i'm jimmy in this video we're looking at the fact that intel is talking about bringing their mobile eye business public what does mobilei mean for investors and ultimately what is this going to do to what's the long-term plan here for intel and ultimately intel investors now in the name of full disclosure i personally own shares of intel but i'm... Read More

Key Insights

• 🧑‍💻 Mobileye's acquisition by Intel in 2017 signaled the tech giant's recognition of the potential in the autonomous vehicle and driver safety market.
• 🥺 Despite Mobileye's significant growth, its revenue is relatively small compared to Intel's overall business, leading to Intel's decision to spin it off.
• ❓ The market value of Mobileye as a standalone company is estimated to be around $50 billion, illustrating its potential for future growth.
• 👶 Intel's move to bring Mobileye public through an IPO would provide a significant cash infusion that could support its plans for two new manufacturing facilities.
• 🍭 Investors have varied opinions on the spin-off, with some preferring to own shares in both Intel and Mobileye, while others see the potential for increased value through the IPO.
• 😒 Concerns about market manipulation and breach of trust arise if Intel uses the announcement of the spin-off solely to boost its stock price without following through on the plan.
• 🚙 The potential success of Intel's move depends on the growth and adoption of autonomous vehicles, as well as Mobileye's ability to remain a leader in the market.

Questions & Answers

Q: What is Mobileye and why is it significant for Intel?

Mobileye specializes in technology for autonomous vehicles and driver safety, which has a promising future. Intel acquired Mobileye in 2017, recognizing its growth potential.

Q: How has Mobileye's revenue grown since its acquisition by Intel?

Mobileye has experienced a compounded annual growth rate of over 40% since 2014. Its revenue has grown significantly, though it currently stands at around $1 billion per year.

Q: Why is Intel considering spinning off Mobileye into a standalone company?

Despite Mobileye's growth, its revenue does not significantly impact Intel's overall business. By spinning off Mobileye, Intel can potentially unlock its true value and focus on its core operations.

Q: How does bringing Mobileye public through an IPO benefit Intel?

Intel would likely maintain controlling interest in Mobileye while raising large amounts of cash through the IPO. This cash infusion could support Intel's plans for growth and expansion.

Summary & Key Takeaways

• Mobileye, a company acquired by Intel in 2017, specializes in technology for self-driving cars and driver safety, experiencing significant growth since the acquisition.

• Intel is looking to spin off Mobileye into its own standalone company, as the revenue generated by Mobileye currently does not significantly impact Intel's overall business.

• The market value of Mobileye as a separate entity is estimated to be around $50 billion, compared to its current worth of approximately $3 billion within Intel.

• Intel's move to bring Mobileye public through an IPO could provide a substantial cash infusion and enable Intel to focus on its core business while maintaining control of Mobileye.