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Will NVIDIA Stock Benefit from Intel's Acquisition of Mobileye?

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When semiconductor chip maker Intel Corp. (INTC - Free Report) announced its acquisition of Israeli self-driving car firm Mobileye NV (MBLY - Free Report) , it sent shock waves through the tech, automaker, and driverless car industries. The deal will combine Intel’s processors with Mobileye’s renowned computer vision, making it the biggest purchase of a company that’s solely focused on the self-driving market.

Intel and Mobileye have a storied past, working together on various projects in the past. Last July, the two companies announced a partnership with BMW with the goal of putting autonomous cars on the streets by 2021, and then in November, they partnered with auto parts maker Delphi to create the Automated Driving Group, building a self-driving car system that can be sold to automakers.

With this type of partnership in mind, Intel and Mobileye’s biggest competitor going forward will be NVIDIA Corp. (NVDA - Free Report) and its collaboration with Tesla Inc. (TSLA - Free Report) . NVIDIA is best known for its gaming and smartphone graphics chips, but like Intel, the company has been developing computing hardware for cars.

Last September, NVIDIA announced its Xavier supercomputer chip, which is powered by the 512-core Volta GPU intended for use in self-driving vars. The chip maker also announced its PX 2 water-cooled “supercomputer,” which Tesla employs in its electric vehicles.

NVIDIA works closely with Volkswagen’s Audi unit and Daimler AG within the driverless car industry, too.

So, what does this mean for NVDA stock?

Just today, shares of NVDA closed up 2.75% to $101.85 per share, and though the stock has stumbled a bit in 2017, it has absolutely skyrocketed over the past one, three, and five years, up 207%, 441%, and 580%, respectively.

Today’s upward movement could be because investors are betting that Intel’s Mobileye buyout is validation of the driverless industry as a whole, as well as NVIDIA’s “own dominance and expertise in the autonomous driving sector,” notes Forbes.

NVIDIA was one of the hottest stocks in the S&P 500 last year, and there’s a very good chance it could perform that way again in 2017.

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