What Wall Street Is Looking For at CESBy
Automobiles are again expected to dominate the annual CES technology gathering in Las Vegas that kicks off on Tuesday.
Electric- and driverless car technologies, together with infotainment innovations, will be a focus at the show, according to analysts. Other technologies likely to be in the spotlight include the latest offerings in artificial intelligence, virtual assistants, connected home products, OLED televisions and high-end personal computers.
Here’s a look at what Wall Street is looking for at this year’s CES.
- Auto technologies are expected to remain the key theme at CES as the presence of automakers and auto equipment suppliers has steadily increased over the past several years, MKM Partners analyst Ruben Roy said
- Self-driving cars and related demonstrations are likely to remain at the forefront, but also expect a bigger turnout of electric vehicles as well as infotainment products
- Investors will likely stay focused on Nvidia Corp., Maxim Integrated Products Inc. and ON Semiconductor Corp.
- Greater visibility into products and strategies for Maxim and ON could be modest positive catalyst for shares; ON is expected to showcase its auto image sensing applications platform
- All major original equipment manufacturers are expected to showcase technologies along with a number of tier-1 suppliers, KeyBanc analysts said; many of these companies will make “meaningful” product, and maybe partnership, announcements
- Suppliers and OEMs that should benefit from the trend of rising capital commitments to technologies enabling autonomous driving, electrification and fuel efficiency include Autoliv Inc., Aptiv Plc, Ford Motor Co., Gentex Corp. and Magna International Inc.
- Stocks most likely to respond to CES-related events should be Ambarella Inc. and Nvidia, Morgan Stanley analysts led by Joseph Moore and Craig Hettenbach said
- Ambarella should demonstrate its assisted car based on the company’s computer vision technology; it’s probably too early to hear about specific auto customer relationships, but that could occur as soon as Ambarella’s analyst day in March
- Nvidia is “at the center” of many of the key innovations in consumer electronics ; expect the Jan. 7 keynote to demonstrate a broad range of growth drivers
- Autonomous vehicle solutions likely to remain the focal point of the show, Goldman Sachs analysts said
- Key technologies to look for include developments in AI/software algorithms that could help drive “validation” and hardware addressing auto market hurdles like Lidar miniaturization and cost reduction or camera-only based vision systems; also, electric vehicle propulsion as OEMs evaluate electrified powertrains to support autonomous vehicles
- New to CES this year will be an AI marketplace featuring innovations in technologies like big data analytics, speech recognition and machine vision, MKM’s Roy said
- While Nvidia will probably remain at the top of investors’ minds when thinking about AI, Intel will probably feature recent advances in the field at the event and in CEO Brian Krzanich’s keynote speech on Jan. 8
- Micron Technology Inc. is also likely to focus on AI as one of the drivers behind increasing memory requirements in cloud- and high-performance computing applications
- Look for updates from Nvidia regarding progress of Drive PX Pegasus platform, clarity on how the company plans to cut operating temperature and power consumption, and new partnerships and potential end-customers, KeyBanc analysts said
- Intel will probably demonstrate the ubiquity of its end-to-end ASIC portfolio that spans from Internet of Things to data center and automotive
Augmented and Virtual Reality
- Updates on Intel’s long-term approach to the the AR/VR ecosystem are of interest given the company’s recent move to wind down its headset reference design, MKM’s Roy said
- Nvidia is also expected to highlight its emerging AR/VR technologies
- Companies will probably showcase mobile-based augmented-reality applications, Bloomberg Intelligence analysts Jitendra Waral and Sean Handrahan said
- AR hardware prototypes are bound to be shown by larger companies and startups, but the hardware may still be years away as a supply chain and standards are still missing; until then, mobile AR will be at the forefront and CES may preview some of the ways that companies leverage AR to differentiate their products
- More extensive voice-based content consumption and device control is likely to be shown; the trend is likely to see accelerated adoption in devices as it rapidly becomes the primary mode of input and interaction; Google Assistant is likely to play catch-up to Amazon Alexa in 2018
- Expect more smartphones to be on display along with more connected home devices that either integrate with Google Home or Amazon Alexa, or adopt their ecosystem infrastructure, KeyBanc analysts said
- Non-U.S. companies such as Alibaba, Baidu and Tencent to showcase enhanced or broadened digital assistant and smart home offerings
- Looking for introduction of multiple new home automation solutions aimed at the do-it-yourself market as well as more more new products that are integrated with Alexa and Google Home, Dougherty analyst Steven Frankel said
- Anticipate Dolby Vision incorporated into lower priced sets, driven by TCL and other Chinese brands; will look to see if Samsung makes progress in expanding its own royalty-free alternative to Dolby Vision, known as HDR10+
- Anticipate bigger and better OLED and QD-enhanced LCD televisions, more pervasive smart home technologies with AI assistants, new “human-machine” interfaces for smartphones and other devices and expansion of Internet of Things offerings, Cowen analysts Rob Stone and James Medvedeff said
- Expect the event to be positive for companies including Control4 Corp., Universal Display Corp., Synaptics Inc. and TiVo Corp.
- OLED televisions, especially units larger than 55 inches, will probably dominate the TV exhibition, Bloomberg Intelligence analyst Simon Chan said
- GoPro is expected to give an update on progress in video editing and sharing capabilities, which should be “key to successfully refreshing” the entry-level Session camera, Morgan Stanley analysts said
- The smart home is set to be a major theme at the show and chipmakers such as Silicon Laboratories Inc. and Cypress Semiconductor Corp. are positioned to see growth from this secular trend, Bloomberg Intelligence analyst Woo Jin Ho said
- Expect to see interesting hybrid designs based on new Intel Corp. and Advanced Micro Devices Inc. chips, MKM’s Roy said
- AMD will probably draw investors, who are looking for notebook and hybrid designs that utilize the company’s recently released Ryzen mobile platform
- Potential for introductions of Intel’s i7 module that incorporates an AMD Radeon GPU
- Higher-end PCs are apt to get thinner, lighter and more energy-efficient, but prices likely remain high, Bloomberg Intelligence analyst Anand Srinivasan said
- Battery advances haven’t progressed at the same pace as other components, and there’s been renewed focus on power management, both at the component level and in software to manage the device
- Intel’s higher-end CPU pricing skew, coupled with elevated pricing in both DRAM and NAND memory, may keep PC prices high, especially for the higher-end models launched at CES
- High-end gaming desktops will attract attention; Lenovo may showcase some newer models, especially after several years of tired designs following the launch of the Yoga
- Full CES schedule here
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