Back to top

Image: Bigstock

Cerence (CRNC) Strengthens Auto Tech With In-Car ChatGPT

Read MoreHide Full Article

Cerence‘s (CRNC - Free Report) shares have returned 9.4% in the past three months compared with the Zacks Computer & Technology sector’s rise of 7.5%. The uptick can be attributed to its expanding footprint in the automotive industry.

Building on this momentum, Cerence reported solid financial results in fourth-quarter fiscal 2023, with revenues reaching approximately $81 million.

With a global auto penetration holding steady at 54% on a trailing 12-month basis, Cerence maintains a strong position in the market.

Cerence's commitment to AI-driven innovation is evident through products like Cerence Assistant with Natural Language Understanding (NLU) Plus, Cerence ChatPro and Cerence Car Knowledge, all geared toward enhancing user experiences and fostering growth of connected services.

Cerence Inc. Price and Consensus

 

Cerence Inc. Price and Consensus

Cerence Inc. price-consensus-chart | Cerence Inc. Quote


To broaden its impact, Cerence recently partnered with Volkswagen (VWAGY - Free Report) to integrate Cerence Chat Pro into Volkswagen's in-car assistant systems.

This partnership signifies Volkswagen's leadership in deploying Cerence Chat Pro through cloud updates to existing vehicles, providing drivers and passengers with an intelligent and entertaining in-car assistant experience.

The innovative solution, leveraging ChatGPT and other sources, allows for a seamless and enjoyable experience, exemplifying Cerence's commitment to advancing conversational AI technology in the automotive industry.

As part of its collaborative effort, Volkswagen and Cerence aim to redefine the in-car experience by collaborating on a new large language model. This enables a seamless voice-and-touch interface across applications within a single conversation for safer and more enjoyable driving, built on Cerence's automotive-grade LLM.

Strong Partner Base Aids Cerence’s Prospects

Cerence's recent partnership with Volkswagen signifies its commitment to reshaping the automotive landscape, focusing on infusing AI into the core of in-car experiences.

Cerence is also benefiting from an expanding clientele, with 14 strategic wins in the fiscal 2023. In fourth-quarter fiscal 2023, it secured several strategic wins, including three in automotive and another in the two-wheeler space.

In addition to the Volkswagen partnership, Cerence recently collaborated with NVIDIA (NVDA - Free Report) and Microsoft (MSFT - Free Report) .

Cerence introduced the Cerence Automotive Large Language Model (CaLLM), powered by NVIDIA, to revolutionize in-car computing platforms, address automaker challenges and enhance user experiences with generative AI capabilities.

Cerence's collaboration with Microsoft integrates OpenAI's ChatGPT model into vehicles through Microsoft Azure, enhancing in-car user experiences with Cerence's automotive technology and Microsoft's cloud capabilities.

Cerence, currently holding a Zacks Rank #2 (Buy), is boosting its top-line growth through the expansion of its clientele. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

For first-quarter fiscal 2024, it expects revenues between $128 million and $132 million. The Zacks Consensus Estimate for revenues is pegged at $130.89 million, indicating year-over-year growth of 56.46%.

Non-GAAP earnings for the fiscal first quarter are expected to be in the range of 84-92 cents per share.

The consensus mark for earnings is pegged at 90 cents per share, unchanged in the past 30 days.

Published in