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Is Intel Zooming Ahead of NVDA, TSLA in Self-Driving Space?

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Intel (INTC - Free Report) , in spite of being a late entrant in the autonomous driving industry, is turning heads with its recent developments in the field. The company has initiated testing of around 100 self-driving cars in Jerusalem and the same fleet will be deployed in several other regions including the United States in the coming months.

Intel Well-Poised to Benefit from Self-Driving Growth Potential

Autonomous driving backed by AI is expected to reduce accidents due to human errors. Per a recent report by Grand View Research, the ADAS market is expected to hit $67.43 billion by 2025. The Verge, on the other hand, quoted Intel stating that there is a $7 trillion self-driving future ahead.

We believe that the players in the industry like NVIDIA (NVDA - Free Report) , Uber, Alphabet (GOOGL - Free Report) , Apple (AAPL - Free Report) along with their automotive partners can make the most of this growth opportunity if the cards are rightly played.

Considering the current scenario, Intel seems to be a very strong player with around 100 self-driving cars on the streets while its competitors are either halting test drive initiatives or opting for virtual testing.

Self-Driving Tests Push Intel Ahead

Intel’s management stated that Jerusalem was chosen as the test city owing to its challenging driving conditions. The cars undergoing scrutiny are aided with 12 cameras to help it have a 360-degree view of the surroundings, which is expected to enhance the “true redundancy of sensing.”

Notably, Intel had announced its plans to test this fleet of 100 vehicles at the time of acquiring Mobileye, a software developer for autonomous driving solutions, which it bought for $15 billion in 2017. The company exhibited its first ever self-driving car at this year’s Consumer Electronics Show (CES) in January.

Intel and Mobileye have plans to make Level 4 and 5 vehicles hit the road with assistance from their vehicle partners by 2021. The notable vehicle partners include BMW, Fiat Chrysler, Honda, General Motors, Nissan and Audi among others. Most recently, Mobileye struck a deal with a European car manufacturer for supplying its self-driving technologies to eight million cars.

Waymo Partnership Bodes Well For Intel

Intel has been involved in advanced driver-assistance systems (ADAS) and autonomous driving related initiatives since quite some time. The company has a collaboration with Waymo, the self-driving car project of Alphabet, which currently has a Zacks Rank #3 (Hold).

Waymo’s self-driving Chrysler Pacifica hybrid minivans inked a contract with Intel. Per the deal, Waymo would use Intel’s sensor processing, connectivity and computing based technologies for real-time decision-making.

In a recent article, Silicon Valley Business Journal quoted Intel’s management stating that the company is also “actively trying to grow in the Asian economies to glean insight into that customer base versus the United States and Western world.”

The duo is also coming up with a system-on-a-chip called EyeQ5, which will be in volume production by 2020.

Per Intel’s CEO, Brian Krzanich, autonomous cars will be collecting the highest amount of data about not only vehicles but data on street signs, streetlights and other related items required for the purpose of safe driving. EyeQ5 will be assisting in enhancing deep learning performance efficiency, which, in turn, is expected to boost demand for the company’s ADAS and autonomous driving technologies.

Intel currently has a Zacks Rank #3.


NVIDIA’s Dominance Hurt by Test Suspension

NVIDIA has a strong foothold in the industry by now. NVIDIA DRIVE is its artificial intelligence (AI) platform meant for assistance in the production of automated and autonomous vehicles.

However, in March this year, Uber Technologies, which had been using NVIDIA’s hardware in its own self driving technology, suffered a setback when one of its autonomous vehicles undergoing test driving struck and killed a pedestrian in Arizona.

Following this incident, the governor of Arizona suspended Uber from test driving autonomous cars in the state for an indefinite period. Reportedly, this mishap resulted in NVIDIA stopping testing of its own self-driving vehicles on roads used by the public.

Instead, the company has introduced NVIDIA DRIVE Constellation, which is a virtual reality (VR) based autonomous vehicle simulator. This simulator enables virtual testing of autonomous vehicles in variable conditions, thereby proving to be a cost effective and safer way to launch these vehicles.

These initiatives are anticipated to help this leading chipmaker, sporting a Zacks Rank #1 (Strong Buy), to restore its image. You can see the complete list of today’s Zacks Rank #1  stocks here.

How are the Other Players Poised?

Apart from chipmakers, car manufacturers and AI-based software providers are also making their mark in the ADAS and autonomous driving industry.

Elon Musk’s Tesla (TSLA - Free Report) , the specialized electric vehicle maker, must be mentioned in this context. In December last year, Musk stated that Tesla is manufacturing customized chips for autopilot mode for future its vehicles.

However, Tesla vehicles in autopilot mode have met with accidents, with the latest being a Tesla sedan crashing into a police car parked in Laguna Beach, CA.

Notably, the company had stated earlier that the autopilot mode is a semi-autonomous one and should not be relied on fully. A recent CNBC article stated that Tesla is working with Advanced Micro Devices (AMD) for the development of its own autonomous driving related AI chips.

This can prove to be another driving factor for Tesla, which has a Zacks Rank #2 (Buy).

Google’s Waymo is another key player in the autonomous driving industry.

The company has a partnership with Fiat Chrysler and Jaguar Land Rover, with test vehicles on the streets of Michigan, Arizona, Washington, and Georgia among others. However, in early May, one of Waymo’s self-driven minivans met with a crash in Chandler, AZ, raising concerns.

Nevertheless, since it has been in this field for a very long time, it has gathered a huge set of valuable data, which is expected to be beneficial for safe self-driving going ahead.

Apple also planned to develop its own electric self-driving car. However, the company is currently focused on software for autonomous cars.

The company recently signed a deal with Volkswagen, per which the Volkswagen’s T6 Transporter vans will be turned into autonomous shuttles for its own employees. The company has also increased the number of its self-driving vehicles under testing in California to 62.

Though much behind in the race, these recent developments in the autonomous driving field are expected to strengthen Apple’s foothold in the industry, which has a Zacks Rank #3.

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