Mobileye stock recorded a sharp decline of 15% last Thursday after the company announced earlier in the day the resignation of founder and CEO Prof. Amnon Shashua. The move came alongside the publication of second-quarter financial reports for 2026 and against the backdrop of general market declines on US stock exchanges.
Shashua (66), who founded Mobileye in 1999 together with Ziv Aviram, will step down from the role of CEO and continue to serve as a board member. The company offered him the position of chairman. The board of directors will hire an executive search firm to select a replacement in cooperation with controlling shareholder Intel. Shashua, who led the development of the company’s computer vision and autonomous driving systems, also recently stepped down from AI21, a company he founded, after it laid off about 60% of its workforce. Today, Mobileye’s technology is installed in more than 250 million vehicles worldwide, and the company is also expanding into robotics. The company’s valuation, which peaked at $39 billion in 2023, currently stands at approximately $7.5 billion.
The hit to the stock occurred despite an improvement in profitability metrics presented by the company in the second quarter. Mobileye reported revenues of $508 million, compared with $506 million in the corresponding quarter last year. Operating loss narrowed to $30 million (compared with $74 million last year), and net loss dropped to $21 million (3 cents per share), compared with a loss of $67 million in the corresponding quarter. Adjusted operating profit rose to $155 million. Following the results, Mobileye raised its annual revenue forecast to $1.97 to $2.02 billion.
Moovit lays off 30% of workforce
Meanwhile, public transit navigation company Moovit, owned by Mobileye, is cutting about 30% of its workforce (about 60 employees) as part of a broad structural and strategic shift. The move is intended to divert resources from the B2B and MaaS sectors to strengthen the consumer arm and deepen integration with parent company Mobileye, particularly around its new robotaxi initiative in the US.
The CEO updated employees on the start of hearing processes, while Shashua noted that the organizational change, along with the integration of artificial intelligence tools, will improve efficiency and focus. The layoffs come against the backdrop of recent reports indicating the company was offered for sale at a valuation lower than that at which it was acquired in 2020.
Black day on the markets
The drop in Mobileye stock occurred on a particularly negative trading day on US markets. The Nasdaq index fell 2.6% and dropped below 25,000 points for the first time since May, while the S&P 500 index weakened by 1.4% and the Dow Jones lost 1.1%. The declines were led by Alphabet and Tesla stocks, following their announcements of increased spending in artificial intelligence and infrastructure, a step that reopened investor debate regarding the pace of return on investment in these technologies.
Beyond corporate results, markets were affected by macroeconomic and geopolitical pressures. Oil prices crossed the $100 per barrel mark following an escalation in the Middle East and Houthi attacks on tankers in the Red Sea.
The rise in energy prices sparked concern among investors over inflationary pressures and led to a surge in yields on 10-year US government bonds to a year-and-a-half high. This development reduced market assessments regarding an upcoming interest rate cut by the Federal Reserve, even though employment data pointed to a decrease in initial claims for unemployment benefits to 187,000, the lowest level since 1969.