Nvidia Wins Key Contract with Tesla

Nvidia Corporation (NASDAQ:NVDA) won a key contract with Tesla Motors Inc (NASDAQ:TSLA) for its new “self-driving” car feature, according to Mizuho Securities, which reiterated its buy rating on the chipmaker.

On Wednesday Tesla announced that vehicles now in production and future Model 3 cars will have the hardware for full self-driving capability. Tesla will use Nvidia hardware to support its replacement for the Mobileye imagine processing system.

“Tesla’s Elon Musk announcing a future road map, noting Tesla car’s going forward will use NVDA’s Titan GPU away from MBLY,” analyst Vijay Rakesh wrote in a note to clients Thursday.

“This underlines positive trend for NVDA’s GPU implementation … Tesla last night announced move into Level4/5 (L4/L5) capability on its cars further accelerating the ADAS [advanced driver-assist system] road map for the automotive ecosystem.”

This may be the first volume production win for Nvidia’s Drive PX 2 automotive “supercomputer”. If this proves fruitful for Tesla it could increase Nvidia’s automotive revenue by over 50 percent.

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