Mobileye, the star company in autonomous driving, plummeted by 29%! It is expected that there will be an excess of customer inventory and a sharp decline in orders.
Mobileye, an autonomous driving technology company owned by Intel, announced on Thursday that its customer inventory is excessive, and it expects a sharp decline in orders in the first quarter of this year, causing its stock price to plummet by 29% at one point during trading on Thursday.
Mobileye, an autonomous driving technology company owned by Intel, warned on Thursday that it expects a sharp decline in customer orders in the first quarter of 2024. As a result, Mobileye's stock plummeted by about 29% during Thursday's trading session.
In its preliminary full-year outlook announced on Thursday, Mobileye stated that there is an excess of inventory among its customers. The company explained that after global supply chain issues impacted the manufacturing industry, automakers stockpiled a large number of Mobileye chips to avoid future component shortages.
"With the easing of supply chain issues, we expect customers to utilize the majority of the excess inventory in the first quarter of the new year," Mobileye stated in its outlook. This means that customers will not be ordering new chips at the same level as the same period last year.
In 2017, Intel announced the privatization of Mobileye for over $15 billion and then relisted the company in October 2022. Last year, Intel sold $1.5 billion worth of Mobileye shares but still holds an 88% stake in the company.
Due to the disappointing performance guidance, Mobileye's stock experienced a decline of up to 29% during Thursday's trading session. However, the company's stock has remained above its IPO price, despite the significant drop on Thursday, with a 12% increase from the initial offering price.