Increased computing capabilities in automotive electronics is good for Tegra processors

With each passing day, manufacturers equip cars with increased computing capability in both the drive train and the dashboard. Dashboard functionalities within cars, including the infotainment system, digital cluster, and automatic driver assistance, are rapidly being computerized. Thus, all these developments point towards a transition in the automotive electronics market, which already is a huge market.

Nvidia’s automotive platforms are on a sharp upward trajectory

According to Strategy Analytics, as the above chart shows, the market for Advanced Driver Assistance Systems (or ADAS) is expected to be worth around $15 billion by 2016, growing at a CAGR of 23%. In Nvidia’s (NVDA) Tegra business, the automotive segment is the fastest growing subsegment. Apart from being a fast growth segment, it offers higher gross margins as compared to the devices. In 4Q15, Nvidia’s automotive segment revenue almost doubled on a year-over-year basis.

You can consider investing in the VanEck Vectors Semiconductor ETF (SMH) to gain exposure to Nvidia. The company makes up about 1.94% of this ETF.

Long standing presence in the automotive space along with partnerships give Nvidia an edge over its peers

According to Nvidia, the company’s automotive platforms appear to be on a sharp upward trajectory. In 2015, over 7.5 million cars are using Nvidia’s technology, up from 4.7 million in 2014. For the past decade, Nvidia has been working on building its automotive computing platform, and therefore is in a strong position to leverage this growth. The company’s customers include prestigious automobile companies like Volkswagen, Honda (HMC), BMW (BMW), and Audi (AUDVF).

Latest articles

Investors have been holding their breath for a Fed rate cut for a while now. But are they prepared in the event that that doesn't happen?

Innovative Industrial Properties (IIPR) continued to slump on July 22. The stock lost almost 6.8% of its value on the day.

22 Jul

Why AT&T Stock Is Down 2.2% Today

WRITTEN BY Ambrish Shah

AT&T stock (T) was trading at $32.14 with a 2.0% loss for the day. Earlier today, it posted a low of $32.08. Is the stock overvalued right now?

The Walt Disney Company’s (DIS) superhero film Avengers: Endgame has finally surpassed the record set by James Cameron’s Avatar.

22 Jul

Why Durect Corporation Is Soaring Today

WRITTEN BY Margaret Patrick

On July 22, Durect Corporation (DRRX) entered into a collaboration with HIV leader Gilead Sciences (GILD).

Pure Alpha, the flagship fund of Ray Dalio’s Bridgewater Associates, fell 4.9% in the first half, the Financial Times reported.