Shares of autonomous driving technology company Mobileye Global (NASDAQ:MBLY) are rising after the firm won an expanded agreement with Volkswagen (OTCMKTS:VWAGY). The agreement is set to bring Mobileye features to Volkswagen vehicles, as well as the Audi, Bentley, Lamborghini and Porsche brands.
MBLY stock is trading today at around $29.60 per share, up more than 4% from its close on March 19. Mobileye has a market capitalization of almost $24 billion.
Still, Mobileye stock is down more than 25% so far in 2024.
MBLY Stock: Eyes Front
Intel (NASDAQ:INTC) bought Mobileye for $15.3 billion back in 2017. The company often featured Mobileye in technology presentations before the hiring of Intel CEO Pat Gelsinger.
Mobileye’s 2022 initial public offering (IPO) was a partial spinoff. The transaction raised $861 million for Intel and MBLY stock jumped 34% on its first day of trading.
Per CNN Business, Mobileye believes that its addressable market can climb from a value of $16 billion as of 2022 to $480 billion by 2030 as cars become increasingly autonomous. Still, shares fell hard back in January after Mobileye lowered its 2024 forecast and warned of a product glut. More recently, the company decided to close its aftermarket unit, laying off 130 people.
Volkswagen wants Mobileye to deliver “Level 4” autonomy. This means there is high automation and the software can drive the car under specific circumstances. However, a driver is still needed. Full automation is reached at “Level 5.”
Volkswagen itself has had a hard time in recent years. Shares are down about 40% for the last two years as the automaker has struggled to gain traction in the electric vehicle (EV) market. Volkswagen delivered 771,000 EVs last year, up almost 35% from 2022.
What Happens Next?
Intel still owns most of Mobileye. Meanwhile, self-driving continues to face a skeptical public.
On the date of publication, Dana Blankenhorn held a LONG position in INTC stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
