Mobileye shares surge on opening day on Nasdaq, valuation crosses $22 billion

Shares of Mobileye rose by as much as 40% on Wednesday, valuing the self-driving technology unit of Intel at more than $22 billion as investors lapped up what could be the last big IPO of 2022.

The strong reception for the Israel-based company bucks the recent trend of market debuts where investors have given the cold shoulder to new listings.

Mobileye at Nasdaq.

It also underscores Mobileye's strong financials, analysts said, which attracted investors who have turned selective amid mounting economic challenges.

"Investors now place greater focus on companies' free cash flows, revenues/profitability or path-to-profitability, over just growth projections," said Paul Go, global IPO leader at EY.

The debut comes after a turbulent period that saw Mobileye settle for merely a third of the $50 billion valuation it was targeting earlier in its IPO.

A thaw in the U.S. IPO market remains elusive. Grocery delivery app Instacart has pulled its listing plans, while social media giant Reddit, which confidentially filed for its IPO in December, has shown no signs of proceeding with it.

"The reopening of the IPO window will still depend on returns improving and volatility settling," said Avery Spear, senior data analyst at Renaissance Capital.

Before being acquired by chipmaker Intel in a $15.3 billion deal in 2017, Mobileye had been listed on the New York Stock Exchange since 2014.

Mobileye develops autonomous driving technologies and competes with Alphabet Inc's Waymo, General Motors Co's Cruise and other automakers who have moved to design in-house driving assistance technology.

Shares opened at $26.71 each, above the IPO price of $21 each.

On Tuesday, Mobileye was valued at $16.7 billion after selling shares above the marketed range of $18 to $20, to raise $861 million.

Goldman Sachs & Co and Morgan Stanley are the lead underwriters for the IPO.