Intel CEO Patrick Gelsinger said Tuesday that the spin-off of its Mobileye self-driving car unit will unlock a "unique asset" that will compare to Elon Musk's Tesla (NASDAQ:TSLA) as a player in the tech-heavy future of the auto industry.
"The only company that we see who's anywhere close is Tesla in terms of capabilities," the chief executive of Intel (NASDAQ:INTC) told CNBC.
Gelsinger predicted that the auto industry will transition to a time when it is dominated solely by electric vehicles and autonomous vehicles, with Mobileye positioned as a major competitor.
"Every car, we believe, will become EV and AV looking forward and this is the asset that will make AV happen at scale," he said.
Gelsinger noted that Mobileye is currently "very profitable," with about $1B in revenue. He added that the company projects 40% revenue growth.
The Intel CEO also suggested that the high valuations placed on recent EV and AV IPOs convinced him to launch a spin-off. Lately, names like Rivian (NASDAQ:RIVN) have come public to market capitalizations that have surpassed those of many legacy car makers.
"[Mobileye] is a very real company, and it's been somewhat hidden inside of Intel. ... This is great for the market," Gelsinger said of the IPO's timing.
Gelsinger clarified that Intel (INTC) plans to continue to own a majority of Mobileye following the IPO, allowing the unit to take advantage of the "much bigger platform that Intel provides." But he said that, at the same time, Mobileye will get more visibility as a separately traded company.
INTC climbed $2.15 in Tuesday's intraday action, rising to $53.14 at about 10:30 a.m. ET.
The stock plunged to a multi-month low in late October after releasing a poorly received earnings report. That slide briefly took INTC below $48, although it remained above its 52-week low of $45.24 set late last year.
Comparing INTC to TSLA during 2021, the semiconductor maker outperformed the EV giant for much of the year.
However, since late September, there has been a major reversal. Thanks to a substantial rally into early November, TSLA now shows a gain of 43% for 2021 as a whole, while INTC is only up about 2%, as this chart shows: