Nvidia (NVDA) and Mercedes-Benz have teamed up to roll out the next generation autonomous driving vehicles with upgradable software starting in 2024.
Under the terms of the partnership, the German automaker will launch a new fleet of vehicles powered by Nvidia’s Drive AGX Orin platform, an autonomous vehicle processor. The platform will enable Mercedes to unify computing in the car to make it easier to integrate and update advanced software features, just like a mobile phone, which periodically gets software updates, the two companies said.
Primary features will be the ability to drive regular routes from address to address autonomously and automated parking, in addition to safety and convenience applications. These capabilities will improve as AI technology advances, Nvidia said.
Starting in 2024, every next-generation Mercedes vehicle will include this software-defined computing architecture, which the two companies say will mark the turning point of traditional vehicles becoming high-performance computing devices.
“The definition of a car will change forever,” said Nvidia founder and CEO Jensen Huang. “No longer will the best moment of your car be at the point of sale. The Mercedes-Benz partnership is the starting point, and behind it are thousands of engineers. They’re your own personal software and research lab, who will stay with you over the life of the car.”
Shares in Nvidia have been on a winning streak this year, jumping 61% to trade at $378 as of Tuesday’s close.
Oppenheimer analyst Rick Schafer this week maintained a Buy rating on the stock and set a price target of $400, calling the partnership a “match made in auto heaven”.
“We remain confident in Nvidia’s ability to remain dominant in AI-accelerator and Gaming markets, with Automotive a largely greenfield growth vertical,” Schafer wrote in a note to investors.
Nvidia has strong backing from the rest of the Street, too. The stock boasts 27 Buys versus 4 Holds and 1 Sell adding up to a Strong Buy consensus. The $381.45 average price target means analysts view shares as almost fully priced. (See Nvidia stock analysis on TipRanks).
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