Baron said that Mobileye, which produces vision-based advanced driver assistant systems (ADAS) chips and software, is "essentially a monopoly. Baron noted that the company has relationships with 23 of the top 25 automakers for its chips and software.
"When there's a tilt in the road, these guys will know about it and able to have the car steer a certain way because they've collected millions of miles of traveling," Baron said, adding that Mobileye's technology has the ability to reduce the approximately 1.5 million vehicle-rated deaths every year.
Baron is the founder of the investment management firm which manages the Baron Funds, and has about $26 billion in assets under management.
About 7.9 million shares of Mobileye were traded by 2:50 p.m. on Wednesday, well above the company's average trading volume of about 3.2 million shares a day.
Insight from TheStreet's Research Team:
Mobileye is a core holding of Bryan Ashenberg's GrowthSeeker.com Portfolio. During the most recent weekly roundup, this is what Bryan had to say about the stock:
Mobileye (Industrials -- MBLY:Nasdaq, 675 shares, 7.15%; $63 price target): Shares of Mobileye roared back to life this week, climbing 10%. The company saw lots of good news hit this week with the most important being the National Transportation Safety Board's call on car manufacturers to make collision avoidance systems standard in newly manufactured vehicles. In an extensive report, the NTSB highlighted that collision warning systems, particularly when paired with active braking, could significantly reduce the frequency and severity of rear-end crashes.
Mobileye stands to benefit from these recommendations as it designs and develops software and related technologies for camera-based advanced driver assistance systems. On Wednesday, Wells Fargo upped its price target on the stock to a range of $56 to $60 from $51 to $54. On Thursday, Investor's Business Daily reported that Mobileye's CEO said that a U.S. carmaker -- rumored to be Tesla Motors ( TSLA:Nasdaq) -- will soon launch a semi- autonomous, nearly hands-free-driving car for highway use, using Mobileye's camera technology. Mobileye's systems marry the company's proprietary software algorithms and its system-on-a-chip design (EyeQ) to provide visual information for the driver-assistance- systems market.
As more entities and manufacturers are urged to make the technology that Mobileye delivers as a standard offering, the total addressable market widens considerably and increased sales should follow. We remain bullish on the stock and see a strong growth ramp ahead for the company.
-Bryan Ashenberg, " Growth Seeker Weekly Summary," originally published 6/15/15 on GrowthSeeker.com