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Reportedly, Intel Corporation (INTC - Free Report) announced this week that it is on track to invest more than $250 million over the next two years to develop fully autonomous driving technology. The company will collaborate with German carmaker BMW and Mobileye N.V. (MBLY - Free Report) , a provider of smart-car visions systems for developing the technology.

Why This Move?

According to Intel’s CEO, Brian Krzanich, the most important aspect of smart cars and Internet of Things (IoT) will be data generation that could be utilized in various ways by the marketers.

An estimated 4 terabytes of data will be produced by each smart vehicle per day through its GPS, radar, cameras and sonar. Data such as the number of passengers in the vehicle, music preferences of individual passengers as well as brand or store preferences will help the marketers to advertise their products.

Moreover, with the use of wearables, it will be possible to monitor focus, behavior, biometric and emotional status to enhance safety and security.

According to Krzanich, there are three challenges around data, namely data size, capability to process data intelligently and last but not the least to ascertain its security. Moreover, he thinks that having access to more data will be quintessential to develop and deliver better user experience in the future.

Intensifying Competition

We note that there is fierce competition in the autonomous driving technology market with the presence of heavyweights such as Alphabet Inc.’s (GOOGL - Free Report) Google and Tesla.

As per an IDC report, worldwide spending on connected vehicles is estimated to reach $29.6 billion by 2017. Given the huge scope that the segment offers, it is no surprise that major players are rushing in to grab a share of the pie.

Zacks Rank & Key Picks

At present, Intel has a Zacks Rank #3 (Hold).

A better-ranked stock in the broader technology space is Applied Optoelectronics, Inc. (AAOI - Free Report) , carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Notably, the consensus estimate for Applied Optoelectronics’ current year improved to 81 cents from 51 cents over the last seven days.

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