Hedge fund manager Tom Hayes has recently expressed his hesitation towards investing in Mobileye, as the company’s share price plummeted by 25%. Referring to it as the “poster child of the last hype cycle before AI,” Hayes dismissed the possibility of purchasing Mobileye shares, emphasizing its speculative nature. Hayes, founder of New York-based investment fund Great Hill Capital, shared his perspective on his podcast called ‘Hedge Fund Tips with Tom Hayes.’
Hayes further justified his stance by highlighting Mobileye’s high valuation and relatively short operating history. He deemed the stock to be too expensive, stating, “I’m not paying 15 times sales for a business that’s been around for five minutes.” Additionally, he critiqued the current excitement surrounding the ‘Internet of Things,’ which he believes has artificially inflated Mobileye’s valuation. Dismissing the “Mobileye dream,” Hayes suggested that investing in Intel would be a wiser choice. As of September 2023, Intel still retains an 88% ownership stake in the Israeli technology company.
The decline in Mobileye’s share price came after the company disclosed that it expected a decline in first-quarter revenues by 50% compared to the previous year. This decrease is attributed to customers holding excess inventory. However, Mobileye remains optimistic that these inventory concerns will subside in the first quarter of this year.
Despite the market turbulence, Hayes remains firm in his decision not to pursue an investment in Mobileye, indicating that its speculative nature and relatively short operational history do not align with his investment strategy.