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NVIDIA (NVDA) to Acquire DeepMap to Bolster NVIDIA DRIVE Platform

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NVIDIA Corporation (NVDA - Free Report) recently entered a definitive agreement to acquire high-definition mapping solution provider to autonomous vehicles — DeepMap — for an undisclosed amount. The transaction is expected to be completed in the third quarter of 2021.

Notably, DeepMap’s mapping solution has already been widely accepted by the AV industry. The acquisition is expected to enrich NVIDIA’s self-driving solutions portfolio by adding DeepMap’s powerful mapping technology to its autonomous operations system, NVIDIA DRIVE.

NVIDIA is currently on a firm footing in the autonomous vehicle market. It is working with more than 320 automakers, tier-one suppliers, automotive research institutions, HD mapping companies and start-ups to develop and deploy AI systems for self-driving vehicles.

Notably, NVIDIA’s focus on incorporating AI into the cockpit for infotainment systems is allowing it to increase its autonomous driving revenues. The company expects its automotive TAM to be $30 billion by 2025, which comprises $25 billion for driving, $3 billion for training/development of deep neural networks and $2 billion for validation and testing.

Markedly, it recently announced that Chinese electric vehicle maker, NIO Limited (NIO - Free Report) , has chosen to use NVIDIA’s self-driving solution to offer advanced automated driving capabilities in its new generation EVs. The partnership will lead to the integration of NVIDIA DRIVE Orin System-on-a-chip processors into NIO’s newly-built automotive supercomputer, Adam. According to NVIDIA, the NIO Adam supercomputer is one of the most powerful platforms for autonomous vehicles.

Moreover, NVIDIA is a cash-rich company with a strong balance sheet. As of May 2, 2021, the company had cash and cash equivalents of nearly $12.67 billion, which is significantly higher than its total debt of $5.96 billion. Since it has net cash available on its balance sheet, the existing cash can be used for pursuing strategic acquisitions with ease.

Zacks Rank & Other Stocks to Consider

NVIDIA currently sports a Zacks Rank #1 (Strong Buy).

Other top-ranked stocks in the broader technology sector include Silicon Motion Technology Corporation (SIMO - Free Report) and Lam Research Corporation (LRCX - Free Report) , both sporting a Zacks Rank #1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate for Silicon Motion Technology Corporation and Lam Research is currently pegged at 8% and 32.8%, respectively.

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