Trip Chowdhry Discusses Tesla's Auto-Pilot & Software Updates, NVIDIA, Mobileye To Benefit

In an e-mail to clients on Monday, Trip Chowdhry of Global Equities Research commented on

's advanced Auto-Pilot and Driver Assistance software update and how companies like

and

will benefit. According to Chowdhry, Tesla has a "secret sauce" of bringing together radar application, ultrasonic, and vision capabilities into its "very compelling" Auto-Pilot Solution. The electronic vehicle manufacturer is also working on an automatic emergency breaking system that can take over the system and apply the full force of brakes to prevent a collision from happening. The emergency breaking system can also alert the driver to a potential danger ahead with no active brake intervention or apply minimal breaking force. Chowdrhy concluded that Tesla's Auto-pilot feature is one of the "key demand drivers" for Tesla as the company's supply and manufacturing activity isn't keeping pace with the strong demand. The analyst also suggested this is a positive for Nvidia who is a supplier of CPUs to Tesla's vehicles while Mobileye is a sensor provider. Bottom line, Tesla has a "formidable advantage" over all other automakers with its 100 percent electric system that has the capabilities to take "action" or "control" over a FiberOptic cable at the speed of light, versus other manufacturers that utilize a series of mechanical leers, which are "significantly slower" and suffer huge latency. Shares of Tesla remain Overweight rated with an unchanged $385 price target which is based on a 10x fiscal 2015 revenue estimate of $6.2 billion, and full year deliveries of 62,000 to 65,000 units – an "achievable" target that also happens to fall above the company's own guidance of 55,000 deliveries. Shares of Nvidia and Mobileye are not rated by Chowdhry.