• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Technology

Cramer: Mobileye Deal Puts Intel Back in the Fast Lane

Anyone who can get a piece of this market is going to do incredibly well.
By JIM CRAMER
Mar 13, 2017 | 06:24 PM EDT
Stocks quotes in this article: INTC, MBLY, NVDA, NXPI, QCOM, GOOGL

I've said it before and I will say it again, autonomous driving is perhaps the biggest tech opportunity on the horizon. Anyone who can get a piece of this market is going to do incredibly well and anyone who can dominate it is going to coin money.

Today Intel (INTC) took a step toward dominance with its $15 billion agreement to buy Mobileye (MBLY) , the Israeli manufacturer that is one of the leaders in Advance Driver Assistance Systems. Mobileye currently works with 27 car manufacturers and has already worked with Intel including on a groundbreaking deal announced last year with BMW.

Now Intel's stock got hit today even as the company is using its ample spare cash to make the acquisition, not its stock. Perhaps investors dumped Intel because $15 billion seems like a large price to pay for a company with only $360 million in revenue and 660 employees.

I think that's totally the wrong way to look at it. What matters here is that Intel is challenged for growth, as that last quarter showed, and the best growth it has is in the overall Internet of Things and this acquisition fits right in.

As CEO Brian Krzanich told employees in an email, "Many of you have asked why we think autonomous cars and vehicles are so important to Intel's future. The answer is DATA. Our strategy is to make Intel the driving force of the data revolution across every technology and every industry. We are a DATA company. The businesses we focus on and deliver solutions to, create use and analyze massive amounts of data. "

Krzanich had made this point to me when I spoke to him last month. He said he wanted to change the perception of Intel. "Thirty two billion of our $60 million is the p.c. but as I go through the rest of the decade, by 2002, the data center, the autonomous car all of these other things will be bigger than the p.c. so we have to start shifting people's thinking that we are a data company because that is where we're headed not where we are."

He went on to explain how autonomous cars fit in with the fast-growing cloud business. "Today I talk about the cloud; it's based on people. It's your tweets, it's your e-mails. It's your Facebook posts. The cloud of tomorrow is going to be based on those autonomous cars."

How big is that market? Brian told me "The autonomous cars put out as much data as 3,000 people. One car is 3,000 peoples worth of data. Put a million cars on the road, that's equivalent to half the population of the world in data."

Yep, it's a huge market.

Intel's not alone. Nvidia's (NVDA) got fantastic chips for autonomous driving. NXP Semiconductor (NXPI) , which is being acquired by Qualcomm (QCOM) , has them too. Perhaps most important, Google's got its own chips as part of Waymo, its autonomous driving division that I think is going to turn out to be the biggest winner in the space. Action Alerts PLUS, my charitable trust, which you can follow along if you join the club, owns NXP and Alphabet (GOOGL) , parent of Google and Waymo because we think this market is the biggest out there. You have more than a million fatalities a year from car crashes. You have as many as twenty million people in this country alone who are disabled and can't drive who could with autonomous cars. It is a fantastic opportunity.

So, I know that the market didn't like the deal. But I think that's viewing it way too short term. When you see the new Intel, the one that's a dominant data center business because of this acquisition, you will want to pay much more for the stock than you would now. I say congratulations Brian on taking the big step to get Intel to be viewed as far more than just a personal computer parts company. It was already more than that in many ways, but this will cement the changed legacy.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Action Alerts PLUS, which Cramer manages as a charitable trust, is long NXPI and GOOGL.

TAGS: Investing | U.S. Equity | Technology | Mergers and Acquisitions | Stocks

More from Technology

Qualcomm's Latest Snapdragon Chip Announcements: 4 Takeaways

Eric Jhonsa
Dec 5, 2019 9:02 PM EST

The mobile chip giant just unveiled a new flagship mobile processor, along with several other products.

Microsoft Is Reportedly Prepping a Cheaper Xbox -- Here's Why That Makes Sense

Eric Jhonsa
Dec 5, 2019 4:55 PM EST

By launching a low-cost Xbox, Microsoft could grow the number of Xbox users it can monetize via game sales and an expanding array of services. AMD could also benefit.

Sector Geography Lesson, Japan's Stimulus and Zooming In on Zuora: Market Recon

Stephen Guilfoyle
Dec 5, 2019 8:48 AM EST

Plus, the Saudis look to press their oil agenda while Europe prints some ugly economic data.

Alphabet's Leadership Change Could Be Good News for 'Other Bets'

Eric Jhonsa
Dec 4, 2019 8:53 PM EST

With Sundar Pichai now the CEO of Alphabet, it's possible that the money-losing Other Bets segment will now run a tighter ship and/or see better execution.

Salesforce and Workday Drops Show That Wall Street Is Still Setting a High Bar

Eric Jhonsa
Dec 4, 2019 5:47 PM EST

While enterprise software firms are still generally reporting good top-line numbers, the group remains in multiple-compression mode -- for now.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 01:06 PM EST CAROLYN BORODEN

    MRK and LVS Targets Coming Up

    View Chart » View in New Window »  LVS View C...
  • 12:01 PM EST BOB LANG

    Rolling up Apple

    just the other day we added some apple calls on th...
  • 12:24 PM EST GARY BERMAN

    Fibocall: The SPX-Cash Long-Term View

    You will hear from many analysts on TV screaming t...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2019 TheStreet, Inc., 14 Wall Street, 15th Fl, NY, NY 10005

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login