What other tech stock to consider?

[Crowded Mind]

+1. Last night my 7 year old said "I like netflix 1000x more than regular TV". And this is really convenient TIVO'ed TV. Streaming is the future. Netflix may not keep it's market share but traditional cable is a dinosaur.

I agree and have felt that it's been obvious for years. Hoping Tesla/EVs plays out the same, because it also seems obvious.

 

[Chickenlittle]

I'm remembering GTAT tonight as last year's Apple event was when we found out they are not using sapphire. I can't wait for my Jan 2016s in GTAT expire so I can forget about getting swept up in that hysteria. The good news is I am still intact which sadly can't be said for everyone. Life's little lessons.

Brings to mind a possible new brokerage service. Lots of people end up owning calls that can't be sold, like calls in GTAT. You could set up a group to hold these. It would be worth PAYING some one to take your worthless calls. That can't be sold. You would be able to declare tax loss this year rather than waiting for expiration. The money you paid would be a lot less than the generated tax loss moved up a year

 

[tftf]

Citron Research sets short term target on $MBLY at $25....just follow the money. Citron exposes the real Mobileye. Worse than $AMBABearish

It was about time someone covered these lofty price targets, there are many parallels to MS' TSLA coverage over the past years:

Citron Research snippet:

In November 2013, Morgan Stanley published a 109-page report on the future of "Autonomous Cars".

In all 109 pages, there are merely two passing references to MBLY, although it had been in business since 1999. Nowhere in the report does Morgan Stanley even consider Mobileye to be the future of the ADAS or autonomous vehicles.

Fast forward 9 months and MS underwrites Mobileye's IPO plus its secondary. Magically, with only $40 million spent on R&D since IPO, Morgan Stanley has anointed MBLY as The Dominant Player in ADAS - now and as far as the eye can see: no competitive threats on the horizon for years... discounted cash flow models to 2029... complete nonsense and in complete contradiction to its own blue paper.

Anyone who followed TSLA and MS' coverage of Tesla with a skeptical eye will find uncanny parallels.

But let's assume for a moment that both completely independent (note the slight sarcasm) MS reports are spot on and become reality in 2020-2029:

So which one is it (if we assume both scenarios become true)?

Tesla dominating with its unique proprietary AI car technology OR MBLY (or a direct MBLY competitor like Bosch, Denso etc.) becoming the dominant supplier for this technology to ALL (or at last MOST) major car makers?

You can't have both - unless you want to pump both stocks.

But that's just my opinion.

 

[Drax7]

MBLY manufactures the chip and Artificial Intelligence which it applies it to computer vision. That chip/algotithm technology package in turn is sold to tesla and other car suppliers that create
packages for the main auto manufactures.

TFTF do you understand what you are talking about?

 

[tftf]

TFTF do you understand what you are talking about?

I understand the difference between a car maker and a component maker in the supply chain.

Did you read and understand the two bullish MS reports on both companies, TSLA and MBLY?

How can Tesla on the one hand supposedly create a huge lead in ADAS (and future driverless cars) when MBLY (or direct or indirect MBLY competitors such as Denso, Bosch...etc.) can equip / supply all major car makers with the same hardware and software packages in the future?

The two bullish MS reports on MBLY and TSLA in this area contradict each other.

What's worse is that MS seem to have completely changed their mind overnight regarding their outlook for MBLY, see my Citron quote snippet above.

These must have been truly magic $40 million spent on R&D since their IPO, catapulting MBLY from also-ran to sudden leader in a future multi-billion industry...or maybe Chinese walls made out of cardboard boxes.

 

[Johan]

Agree on the Morgan Stanley corruptness. You have a point tftf. However there is likely room for both TSLA and MBLY to grow a lot in parallel. It's more about what each company does to keep evolving and not a lot about what the competition does.

Now, more importantly; this is no longer the cool stocks thread

 

[Drax7]

Mbly's chip/algoriqhm is the equivalent of "intel inside" in your computer. How it gets adapted by tesla or other cars
manufacturers will vary. Tesla is the only car manufacturer dealing directly with Mobileye , most others are
letting tier one suppliers figure it out for them. The final outcomes may differ. Given teslas engineering capability
they will most likely be second to none.

 

[dakh]

...Given teslas engineering capability
they will most likely be second to none.

..or third to Google and Apple. We don't know how much of a priority it is for Tesla to make this happen. They certainly could become the top dog but remember keeping highway lane is a hell of a lot easier than autonomous driving. Like a couple orders of magnitude easier. And we know that Google already is moving in that direction for a while (solving the bigger problem). Tesla has advantage in having real cars on the road, Google has advantage of the sheer quality and quantity of R&D it can throw at the problem and in existing experience with maps and cloud services (and ability to develop them further) that will aid in solving this problem. They also have a ridiculous number of people with phones on the road that they can and do gather data from.

 

[Drax7]

..or third to Google and Apple. We don't know how much of a priority it is for Tesla to make this happen. They certainly could become the top dog but remember keeping highway lane is a hell of a lot easier than autonomous driving. Like a couple orders of magnitude easier. And we know that Google already is moving in that direction for a while (solving the bigger problem). Tesla has advantage in having real cars on the road, Google has advantage of the sheer quality and quantity of R&D it can throw at the problem and in existing experience with maps and cloud services (and ability to develop them further) that will aid in solving this problem. They also have a ridiculous number of people with phones on the road that they can and do gather data from.

Naaah, MobileYe has the single most effective technology ; camera vision is the cheapest and most data rich
approach so far, better than radar or lidar, but equally important the cheapest. If it is going to have wide mass appeal it must be cheap. Concerning Apple its clueless, infotainment maybe .

 

[dakh]

Naaah, MobileYe has the single most effective technology ; camera vision is the cheapest and most data rich
approach so far, better than radar or lidar, but equally important the cheapest. If it is going to have wide mass appeal it must be cheap. Concerning Apple its clueless, infotainment maybe .

I'm just going by what was out in various articles and presentations -- current thinking is that camera is only enough to implement a limited number of scenarios. Sure MBLY got that cornered but that doesn't mean the full implementation will have all sensors supplied by them. We don't yet know who will be supplying the rest of the sensors, and we don't know who's software will the full implementation run. Too many unknowns.

 

[Drax7]

I'm just going by what was out in various articles and presentations -- current thinking is that camera is only enough to implement a limited number of scenarios. Sure MBLY got that cornered but that doesn't mean the full implementation will have all sensors supplied by them. We don't yet know who will be supplying the rest of the sensors, and we don't know who's software will the full implementation run. Too many unknowns.

Check Mobileye's website presentation, and q4 chip to be released soon, 8 cameras will cover autonomous driving, cameras are cheap and installed by
the car manufacturer.

 

[tftf]

Concerning Apple its clueless, infotainment maybe .

Yes, Apple is really clueless in everything they do. They hire people from clueless companies, including one called Tesla:

On Friday, Reuters reported that Jamie Carlson, a former senior engineer from Tesla, has joined Apple according to his LinkedIn profile, which simply says he’s working on a special projects team at the company since August. Carlson was previously an “Autopilot Firmware Manager” at Tesla, meaning he worked on the company’s autonomous driving technology.

Apple has hired a steady stream of people with relevant experience, such as Megan McClain, previously a Volkswagen engineer with expertise in automated driving, graduate researcher Vinay Palkkode who came from Carnegie Mellon, Xianqiao Tong, a former Nvidia engineer who worked on computer vision software for driver assistance systems, and Paul Furgale, the former deputy director of the Autonomous Systems Lab at the Swiss Federal Institute of Technology, as the Wall Street Journal reported.

Apple hires yet another driverless car expert from Tesla - Fortune

Apple will probably also run of out of money soon. They only have around $200 billion in the bank at the moment.

MBLY has this market cornered for the coming decades.

Sarcasm off.

 

[Drax7]

tftf i have been long apple since pre split level of $80 back in 2009, and just purchased some more after the presentation 2 days ago.

Concerning computer vision and the application of artificial intelligence
to analyze what the camera sees, they are clueless, its not their field of competence.
Go to Mobileyes website and see what they have done, do yourself a favor.

 

[tftf]

Concerning computer vision and the application of artificial intelligence
to analyze what the camera sees, they are clueless, its not their field of competence.

Did you read my Fortune snippet above before writing this? Let's pick just one person mentioned there. Have a look at his publications:

http://paulfurgale.info/

Clueless?! Really? With its huge cash fortress, Apple can (and has been) poach/hire top talent in any sector it wants to enter one day.

In addition, other large car suppliers such as Bosch, Denso etc. won't have their lunch eaten by MBLY. They will also step up their efforts.

 

[Drax7]

The scientist running mobileye is a phd in computer vision/artificial intelligence from MIT.
Second to nobody in the field, you cannot hire a guy like this.
Once again listen to his comprehensive presentation on computer vision,
its humbling, its on the firms website.

 

[tftf]

If you think Apple, Google, Uber and leading global auto suppliers (Bosch, Continental, Denso, Delphi...) are all clueless in front of MBLY and this one scientist (for the record, some of the MBLY competitors have hundreds of ADAS specialists) go ahead and buy more MBLY shares.

Morgan Stanley will certainly appreciate if the public keeps snapping up MBLY and TSLA shares at any price.

I have a very different view on both MBLY and TSLA - there will be plenty of competition and intense operating margin battles within a few years imho. But this has been discussed before so I will stop here.

 

[Johan]

If you think Apple, Google, Uber and leading global auto suppliers (Bosch, Continental, Denso, Delphi...) are all clueless in front of MBLY and this one scientist (for the record, some of the MBLY competitors have hundreds of ADAS specialists) go ahead and buy more MBLY shares.

Morgan Stanley will certainly appreciate if the public keeps snapping up MBLY and TSLA shares at any price.

I have a very different view on both MBLY and TSLA - there will be plenty of competition and intense operating margin battles within a few years imho. But this has been discussed before so I will stop here.

While I tend to agree with you here concerning MBLY (Sorry Drax, love your enthusiasm but I think some here are overestimating the gap between MBLY and its competition), I have to disagree with regard to TSLA. with MBLY it's for all practical purposes are pure hardware + software suit = technology that puts them apart. As you say both Google or Apple can likely take in this lead quite easily if/when they decide to do so, and if they lack the in-house competency they can just poach and hire. With TSLA vs. the rest the technology is just one small thing, the others would have to surpass TSLA in logistics, battery supply (if you have no GF, tough one), real world EV experience, dedicated fan/customer base too! That's cornering the market even as you're only making 50k cars this year.

 

[dakh]

Check Mobileye's website presentation, and q4 chip to be released soon, 8 cameras will cover autonomous driving, cameras are cheap and installed by
the car manufacturer.

Yes got it, their claim is other types of sensors are optional and are mostly for backup/assurance. I don't question their direction or impact. What they have is an important piece of the puzzle but it's far from a full solution. There are other players with distinct advantages in solving other parts of the puzzle and to say that Tesla will likely out ahead is, in my opinion, premature. That's not their core competency. I haven't seen any claims from Tesla that they're going after developing full auto driving by themselves. Are there any? Taking MBLY solution directly without intermediary and integrating it into Model S driver assist package, at least the way I see it, has almost nothing to do with investments into full auto driving and is probably a couple of orders of magnitude smaller investment.

In short, what evidence do we have that TSLA is going after developing fully automatic driving?

 

[dakh]

I guess to answer my own question, the two pieces I can think of is, yes the fact that they chose to integrate MBLY technology themselves is a factor, but the biggest one is Musk's refusal to comment on Uber during the earnings call. Something is going on but we don't know what that is.

 

[Johan]

Yes got it, their claim is other types of sensors are optional and are mostly for backup/assurance. I don't question their direction or impact. What they have is an important piece of the puzzle but it's far from a full solution. There are other players with distinct advantages in solving other parts of the puzzle and to say that Tesla will likely out ahead is, in my opinion, premature. That's not their core competency. I haven't seen any claims from Tesla that they're going after developing full auto driving by themselves. Are there any? Taking MBLY solution directly without intermediary and integrating it into Model S driver assist package, at least the way I see it, has almost nothing to do with investments into full auto driving and is probably a couple of orders of magnitude smaller investment.

In short, what evidence do we have that TSLA is going after developing fully automatic driving?

As you said yourself, Musks non-answer to the autonomous fleet question left an impact with me. Add to this the fact that they're this year going to catch up to the other manufacturers, that have been working on auto driving for many, many years (Audi, Daimler, Volvo) in terms of actual features in production cars (lane holding, traffic aware cruise control, auto braking, collision avoidance, blind spot warning) and also adding some stuff that I don't think anyone has: auto parking on private property for starters, which may sound like a gimmick but c'mon it's actually kind of a big thing - it's basically automated driving on a small scale. To think Tesla had nothing in 2010 on this, is now up to speed, where will they be in 2018???