Mobileye Sinks 5% While BlackBerry Rises 3%: Is Wall Street Choosing Car Software Over Chips?

Mobileye Global (NASDAQ:MBLY | MBLY Price Prediction) and BlackBerry Limited (NYSE:BB) both sell technology that goes inside the car, yet the two stocks are heading in opposite directions. Shares of Mobileye are trading at $6.59, down 5% on the day, a drop that adds to deep losses for the stock this year. However, BlackBerry stock is at $8.88, up 3%, a gain that runs directly against the slide in Mobileye shares.

For a read on the wider vehicle technology theme, the Global X Autonomous & Electric Vehicles ETF (NASDAQ:DRIV) is at $29.33, down 0.5%. The SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is at $760.81, down 0.4%, leaving major indexes only slightly lower. Against those small declines, the selloff in Mobileye Global stock stands out as the sharpest move in the group by a wide margin.

Sellers Press Mobileye Global Lower Again

Mobileye hasn’t issued a press release alongside the decline, which places the attention on how the market is valuing the stock itself. Selling pressure is building on a stock that has already given up a large portion of its value this year, and each fresh leg lower tests the patience of longer-term holders, who have endured an extended string of declines.

Demand from carmakers sets the pace for Mobileye’s business. Automakers order its EyeQ chips program by program and in line with the vehicles they build. That tie to production schedules means doubts about auto output can reach the stock quickly, even when the company itself has said nothing new. On the upside, Mobileye also has a self-driving robotaxi program under its Mobileye Drive platform, giving bulls a growth story beyond driver assistance.

BlackBerry Gains as the Auto Tech Fund Barely Moves

BlackBerry’s QNX unit licenses the real-time operating system that runs beneath a car’s software, from digital cockpits to driver-assistance features. Carmakers typically pay QNX through development licenses and per-vehicle royalties, a model built on software running across many platforms. A secure communications business also sits inside the company, so BlackBerry stock answers to more than the auto cycle alone.

Shares of BlackBerry have rallied hard this year, a run that contrasts sharply with the extended slide in Mobileye shares. With major indexes lower, the advance in BlackBerry shares looks even more notable for a stock tied so closely to automotive software. Skeptics argue that after such a run, any slowdown in automaker software spending could hit the stock hard.

Electric vehicle makers anchor the Global X DRIV fund, and BlackBerry and Mobileye each make up a minor piece of it. Battery suppliers and semiconductor companies fill out much of the rest of the lineup, alongside a smaller group of vehicle technology names. That slight dip in the fund therefore offers a read on the broader electric vehicle trade and says little about either supplier.

Mobileye still has a broad base of automaker customers and a robotaxi plan that could lift revenue per vehicle over time, which is the core of the bull case. Near-term chip demand is central to the bear case, since lower orders from carmakers would weigh directly on shipments. Taken together, the decline in Mobileye stock shows the market tending toward the cautious side of that debate.

Mobileye’s Next Report Holds the Key

Mobileye’s upcoming quarterly report will show whether demand from automakers has steadied. Steadier orders could support the view that the selloff has run ahead of the business, while another lower reading could extend the slide.

Caution is warranted as MBLY stock wobbles today. Investors considering share exposure should size their Mobileye positions carefully given the stock’s long decline.

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