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Investing.com -- Goldman Sachs downgraded Mobileye Global (NASDAQ:MBLY) Inc to Neutral from Buy given a weaker-than-expected market share gains, rising competition in advanced driver assistance systems (ADAS) and autonomous vehicles (AV), and a valuation that appears full at current levels.

The firm kept its $17 price target unchanged, with the stock trading down 6% at $15.7 on Monday. 

Stock’s underperformance is driven by slower adoption of Mobileye’s technology, especially in China, and broader headwinds in the auto industry, including tariff-related uncertainty.

Goldman said it had overestimated Mobileye’s design win momentum and market penetration when it first rated the stock a Buy. Since then, shares have fallen 38%, while the S&P 500 has gained 52%.

While acknowledging Mobileye’s strong technical capabilities in vision systems and AV, the note highlighted that fewer automakers than expected are adopting its solutions.

Some original equipment manufacturers are turning to in-house efforts or rival platforms, and several are exploring licensing AV tech from players like Tesla (NASDAQ:TSLA) or Waymo, Goldman said.

The brokerage expects Mobileye to remain a relevant player in the space, pointing to partnerships with Volkswagen (ETR:VOWG_p) and AV deployment for networks like Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT).

However, it now sees adoption occurring at a more “moderate” pace.

Goldman also flagged limited growth in AV volumes over the next two to three years, especially in the U.S., where AVs are expected to remain confined to commercial applications in the near term.

Despite long-term potential, Goldman sees risks to Street estimates for 2026 and 2027 and prefers to stay on the sidelines given current valuations.

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