“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” That’s what Warren Buffett said, a man who traditionally avoided tech stocks because he finds them difficult to understand. Today, we want to understand why Mobileye (MBLY) is expecting declining revenue growth next year and decide if this computer vision leader should ever find a place in our disruptive tech portfolio. While the valuation is starting to become more attractive, we need to be sure this is a great company, not a fair one.
The Autonomous Driving Thesis
“Investors can look to three areas of investment, including electrical and control systems and sensors; vehicle services; and infrastructure upgrades.” That’s according to a report by L.E.K. Consulting that estimates Level 5 autonomy – complete driverless capabilities – will finally start to emerge by 2035. In the meantime, the other four levels of driver assistance will be coming online in succession.
- Level 2 (today): control the vehicle’s steering and braking under certain conditions such as adaptive cruise control and lane-keeping assist systems.
- Level 3 (coming soon): allows the vehicle to control all aspects of driving under “certain conditions,” with a human standing by to intervene as needed
- Level 4 (by 2035): Same as above except “all conditions”
- Level 5 (???): No human needed – the Holy Grail
All the above
