Nvidia Expands Lead In AI-Driven Vehicle Suppliers With New Products, New Partnerships

NVIDIA Corporation NVDA is taking an assertive lead among self-driving car suppliers with the introduction of Drive PX Pegasus, its first product supporting Level 5 autonomy.

Between the new supercomputer and the confidence of DHL Group, a fresh partner on self-driving delivery fleets, Nvidia is justifying AV-driven bulls.

What’s To Be Gained

The product and partnership should also appeal to Nvidia’s 225 Drive PX automotive partners, 25 of which are working on robotaxi fleets.

Altogether, the AV opportunity presents a total addressable market of $8 billion and 25 million cars by 2025, according to Bank of America Merrill Lynch.

“These announcements are important as we believe self-driving cars represent the single largest underpenetrated TAM for NVDA behind AI in the data center,” analysts Vivek Arya and Adam Gonzalez wrote in a Thursday note.

As yet, the Street has only factored in $1.8 billion in auto sales for 2022, but Merrill Lynch anticipates the AV market driving significant upside to estimates in the coming years.

Nvidia’s To Lose

Nvidia is slowly building a lead in vehicular AI, and at this point, little seems to stand in its way.

Pegasus introduced new performance standards and, by Merrill Lynch assessments, has no true rival. While the new product offers 320 trillion operations per second (TOPS) and Nvidia’s last-generation unit 30 TOPS, their closest competitor, Intel Corporation INTC and Mobileye’s EyeQ5, boasts just 12 TOPS.

NXP Semiconductors NV NXPI, Xilinx, Inc. XLNX, Advanced Micro Devices, Inc. AMD and Renesas also lag in performance.

However, as automakers only yet produce Level 3 cars, they’ve got years to catch up and may eventually compete, according to Merrill Lynch.

For now, the analysts maintained a Buy rating on Nvidia with a $210 price target. At time of publication, shares were trading around $191.50.

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