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Intel to Up its Game in AI & Autonomous Vehicles in CES 2018

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The technology sector is in focus this week with CES 2018 set to commence today and run through the weekend. Notably, it is an annual technology tradeshow conducted by the Consumer Technology Association every year in January in Las Vegas.

Intel Corporation’s (INTC - Free Report) Chief Executive Officer (CEO) Brian Krzanich during a ‘Prime Keynote’ in the CES 2018 talked about the company’s initiatives in driverless vehicles and powering artificial intelligence (AI) technology through partnerships and strategic deals.

Autonomous Vehicles & AI: Key Catalysts

Intel revealed a number of partnerships in the space. At the event, the company announced few important partnerships — with BMW, Nissan, Volkswagen AG, and Ferrari — which show Intel’s growing dominance in providing AI platforms which will power future vehicles.

It will also leverage Intel’s Mobileye-based mapping technology for improving self-driving cars navigation process.

Intel also joined forces with SAIC Motor and NavInfo to extend crowdsourced map building to China. SAIC Motor will build cars of Level 3, 4, and 5. These vehicles will be powered by Mobileye technology, which means it will be able to handle most driving situations itself.

Additionally, Intel is also moving ahead in the virtual reality (VR) and and non-VR gaming space. It collaborated with Paramount Pictures for the next-generation VR andnon-VR Challenger League.

It is believed that the Automotive Edge Computing Consortium which aims at developing an ecosystem for connected cars to support emerging services such as intelligent driving, the creation of maps with real-time data and driving assistance based on cloud computing, bodes well for Intel.

We believe that the company’s focus on the self-driving car market will boost sales of processing chips, sensor-chips, cloud software and many more, which will ultimately drive top-line growth.

Krzanich alsoadded that Intel is shaking hands with Ferrari North America to brings its AI technology to the Ferrari Challenge North America Series races to be held on six courses in the United States this year. The Ferrari Challenge will use Intel Xeon Scalable processors chips to enhance the experience to viewers online.

Other Highlights

Intel and Micron have also announced a mutual agreement to work separately in order to complete development of their third generation of 3D NAND technology. Intel and Micron will jointly develop the 3D XPoint at the Intel-Micron Flash Technologies (“IMFT”). The product, is expected to sample this year, and could enter production as early as 2019 at their joint facility in Lehigh, UT.

Intel is also partnering with Advanced Micro Devices’ (AMD - Free Report) Radeon Vega M GPUs with a purpose to use them in its next generation CPUs. Aiming at notebooks and small PCs, this new processor, the 8th Generation Core Processor with Radeon Vega M Graphics will be available starting in spring.

Bottom line

With continued focus on developing new and more advanced AI technologies for self-diving cars, we believe the company is well poised to rapidly penetrate the autonomous car technology market, currently dominated by the likes of NVIDIA (NVDA - Free Report) and Qualcomm (QCOM - Free Report) .

Estimates provided by various research firms further encourage us about Intel’s prospects in the space. According to data available from BI intelligence, 10 million self driving cars will be on the roads by 2020.

Per Statista, the market for fully autonomous vehicles will grow to almost $6 billion, while partially autonomous vehicles market will reach $36 billion by 2025. According to Boston Consulting Group estimates, the autonomous car market will be worth $42 billion by 2025 and $77 billion by 2035.

The company has also gained 34.7% over the past six months, outperforming the industry’s growth of 28.6%.

Currently, Intel carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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