Self-Driver’s Ed

Image source: Africa Studio on Shutterstock

What's going on?

Intel announced plans earlier this week to list Mobileye on the stock market, as the chipmaker encourages its fledgling self-driving business to make its own way in the world.

What does this mean?

Intel’s decision to buy Mobileye in 2017 has turned out to be a shrewd one: electric vehicle (EV) makers are increasingly adding self-driving capabilities to their latest models, which has created huge demand for Mobileye’s specialized chips and software. So much, in fact, that the business has been outperforming its parent company by some way: Mobileye’s revenue is expected to grow by 40% this year, while Intel’s is expected to fall around 6% (tweet this).

But Intel’s nothing if not a proud dad, boasting on Monday that the segment has now won major contracts with over 30 top carmakers. In fact, research firm Guidehouse Insights reckons Mobileye has already cornered about 80% of the global market for “advanced driver-assistance vision systems” – or, uh, sensors. So like every good parent, Intel’s finally ready for its kid to stand on its own four wheels: the chipmaker announced Mobileye would list on the stock market next year.

Why should I care?

For markets: Papa needs a new pair of shoes.

Intel’s decision isn’t just in Mobileye’s best interests: Morgan Stanley reckons the listing will allow the chipmaker to free up cash better spent elsewhere, while still allowing it to profit from Mobileye’s growth as majority owner. That should only benefit its beleaguered stock, which has underperformed an index tracking some of the biggest chipmakers by 25% this year. Tuesday was a good start: investors initially sent Intel’s share price up 9%.

The bigger picture: Intel has other tricks up its sleeve.

Intel also announced this week that it’d be buying Screenovate, whose technology allows devices with different operating systems to interact with each other. Intel thinks the new tech will slot into its existing PC products neatly, and should help bring an influx of new customers on board.

Originally posted as part of the Finimize daily email.

The top 2 financial news stories in 3 minutes. Join over one million Finimizers

Read next

Face Value

Sign up to Finimize

Get the two most important global financial news stories each day. Sent at midnight UK time.

Get started with one email a day

The top financial news stories in 3 minutes.