In a move to retain its leading position in the driverless car technology provider, NVIDIA Corporation NVDA recently partnered with Bosch, the world's largest automotive supplier, to develop artificial intelligence (AI) self-driving systems for mass market cars. Per the agreement, NVIDIA will provide its deep learning software and processors, while Bosch will focus on developing censors.
The system will be built on NVIDIA's next-generation NVIDIA DRIVE PX technology with Xavier AI, which, according to the company, will handle the massive amount of computation required for a driverless vehicle. NVIDIA’s Xavier AI supercomputer chip is capable of sensing the vehicle’s surroundings, environment, mapping, and predicting behavior of other objects.
NVIDIA CEO Jen-Hsun Huang noted, "Using (the) Drive PX AI car computer, Bosch will build automotive-grade systems for the mass production of autonomous cars.” He further added, "Together we will realize a future where autonomous vehicles make mobility safe and accessible to all."
The recent partnership is seen as NVIDIA’s determined focus on remaining ahead of its rivals – Intel Corporation INTC and Qualcomm Inc. QCOM – in the driverless car technology space. The competition in the industry has heated up with Intel’s recent deal to acquire Mobileye N.V. MBLY for $15.3 billion.
Although, the acquisition will certainly fortify Intel’s presence, it will still remain way behind NVIDIA at least in the near term. We believe NVIDIA’s powerful GPUs, and expertise in machine learning and AI gives it a competitive edge over Intel for the time being.
NVIDIA’s foray into the autonomous vehicles and other automotive electronics space has been driving its stock higher since mid 2015. Notably, the stock has been clocking solid returns over the past one year and has gained 209.9%, outperforming the Zacks categorized Semiconductor-General industry’s gain of just about 44.1%.
It should be noted that NVIDIA entered into the autonomous vehicle and other automotive electronics space in 2015 by launching a computer vision system at the CES. The company hasn’t looked back since then and has been consistently bringing new and more advanced technologies into this space.
At the beginning of 2016, NVIDIA launched DRIVE PX 2 – the world’s most powerful engine for in-vehicle AI. In Sep 2016, the graphic chip behemoth unveiled an AI supercomputer chip designed for self-driving cars called Xavier at its GPU Technology Conference (GTC) in Amsterdam.
With sustained focus on developing new and more advanced AI technologies for self-driving cars, we believe that the company is well poised to grow in the driverless vehicle technology space.
It should be noted that during the last reported quarterly results, the company witnessed a 38% year-over-year jump in automotive segment revenues, mainly driven by premium infotainment and digital cockpit features in mainstream cars.
Currently, NVIDIA carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
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