Mobileye (MBLY) is an advanced driver-assistance system (ADAS) and autonomous driving (AV) company. It has its own hardware, like the EyeQ system-on-chip (SoC).

It has been quite a rollercoaster for the market. Mobileye first went public in 2014 and became the largest Israeli IPO in U.S. history before being acquired by Intel (INTC) in 2017 for $15.3 billion. It then got spun off in 2022. Intel took a significant stake as MBLY stock peaked above $45 but then traded sideways throughout 2023 before taking a nosedive.

It declined by nearly 75% from December 2024 to September 2025 and has had multiple ups and downs since. As of right now, it is just a few cents above its 52-week low.

Why Mobileye Is Laying Off Staff

Mobileye reported on Dec. 8 that it is laying off 5% of its staff as the company is seeing a fall in demand. There is a multi-quarter reset in customer ordering after excess inventory built up and auto/ADAS demand fell. The decline is linked especially to China, as there's now intense competition from local companies who are offering self-driving software for cheaper and, often, better.

Mobileye has been cutting costs and narrowing focus, including job reductions and scaling back LiDAR development work, which investors often read as a sign that some growth bets are being delayed or reprioritized. Separately, Intel’s sale of a large block of Mobileye shares (with Intel’s stake expected to fall to about 80%, alongside a Mobileye repurchase) created added supply/overhang and coincided with a notable down move in the stock.

Mobileye's Financials Are Going Downhill

Mobileye's financials are not yet bleak, but they've been deteriorating as of late. Revenue growth started plateauing and has started declining instead. Revenue in 2023 stood at $2.08 billion and fell to $1.65 billion in 2024. 2025 revenue is expected to recover and be $1.88 billion for the year. It's an uphill battle for the company to meet those expectations if orders from China keep slowing.

On top of the top line not doing so well, Mobileye has been reporting consistent losses. Operating losses stood at $109 million in Q3 2025. Back in Q3 2025, Mobileye reported an operating profit of $8 million.

The biggest positive factor is the cash flow you are getting. Free cash flow was $128 million in Q3 2024 and rose to $437 million in Q3 2025. I wouldn't get too excited over this.

You may be looking at a classic "Tech Stagnation" cash flow statement. When a hardware/tech business stops growing (sales retreat) but has a massive legacy structure, it often generates cash temporarily by "eating itself." The company is selling off old inventory and paying employees in stock.

Is It Game Over for MBLY Stock?

I wouldn't worry about the company going bankrupt. The stock may keep going down, but if ADAS demand rises, it can continue growing from here. Analysts expect that to happen, and this inventory phenomenon can turn out to be temporary, too.

Mobileye has $1.75 billion in cash and cash equivalents. That amount of cash for a business this size puts bankruptcy almost completely out of the picture.

Additionally, EPS is expected to rebound sharply next year and keep growing.

If ADAS demand still keeps declining, the company has built up enough in-house knowledge to shift its focus elsewhere. Software for robots, drones, and military use cases is seeing explosive growth. I expect Mobileye to tap into those markets at some point in the future.

If anything, I'd rate MBLY stock a "Buy" while it's weak.

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