When looking at Mobileye Global’s (MBLY) business, it’s difficult not to notice the steadily closing intersection between science fiction and reality. Many years ago, the idea of self-driving cars was a Hollywood fantasy. Now, with advanced optics and software, this remarkable concept could soon be traversing our roadways. Of course, much has to happen for this paradigm to materialize, which will cause tremendous choppiness in MBLY stock.
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What’s more problematic, Mobileye is especially prone to shifts in market sentiment. Earlier this year, seemingly everybody was raving about artificial intelligence and other automated innovations, thus sending valuations for certain enterprises to the moon. However, as premiums became extremely high, investors questioned the prudence of bidding up such shares. Subsequently, a steep correction materialized, taking MBLY stock down with it.
However, buyer enthusiasm could be poised to make a comeback. Recently, JPMorgan analysts stated that they expect the Federal Reserve to lower the benchmark interest rate by 25 basis points at the conclusion of its Dec. 10 policy meeting — a pivot from their earlier forecast of holding rates steady. If a cut is issued, that could have significant implications for financing costs, which would presumably be a key element for ambitious, growth-oriented enterprises.
While the market was busy absorbing the potential implications of an accommodative policy, MBLY stock printed a rare quantitative signal that could translate into further upside. As such, I’d like to present a mathematical case for near-term bullish optimism in Mobileye.
Using Calculus to Decipher MBLY Stock Directionality
Under Ashby’s Law of Requisite Variety, an attempt to control a system by a controller must “feature complexity that is adequate enough to address the variation of the system being controlled.” That’s a clunky way of saying that a methodology cannot be materially simpler than the system that it seeks to explain.
When we look at the stock market, it’s one of the most complex environments known to humankind, featuring chaos, stochasticity, heteroskedasticity, and reflexivity, among many other variable characteristics. It’s structurally impossible for fundamental analysis or technical analysis to capture the detailed nuances that go into a security’s market price. As such, calculus represents the bare minimum threshold of the tools necessary to truly understand equities trading.
However, because of the kinetic nature of stocks, just using garden-variety calculus is not enough. Instead, we need a unified framework that captures multiple theories and integrates them into a cohesive whole to uncover alpha. To better achieve this ambitious goal, I would like to put forward a proprietary framework called “trinitarian geometry.”
Presenting ‘Trinitarian Geometry’ as a Concept
Essentially, trinitarian geometry is a Kolmogorov-Markov process layered with kernel density estimations (KDE). It combines probability theory (Kolmogorov), behavioral state transitions (Markov), and calculus (KDE) in an effort to address the total ontology of stocks: uncertainty, behavior, and geometry.
Stated differently, we’re seeking to understand probability, the likelihood of change, and the shape of that change.
Still, a stock price chart doesn’t naturally lend itself to advanced calculus. Therefore, we need to arrange the data through reification and iteration. First, we must treat probability as a physical object (reification) so we can measure it using calculus. Second, we convert the stock as a singular journey across time into multiple segmented trials (iterations).
Granted, the number of trials used is a subjective element. Personally, I prefer 10-week sequences, and I’ve been using this chosen starting point for several months. Other quants may have different preferences and may notice other tendencies. The most important point here is that the trials themselves are consistent within the dataset.
Trading Mobileye Stock with Empirical Data
Using the above trinitarian geometry, the forward 10-week returns of MBLY stock can be plotted as a distributional curve, with outcomes mostly ranging from $10.60 to $12.20 (using Friday’s close of $11.82 as the anchor price). Further, price clustering would likely occur around $11.45.
However, under the principle of heteroskedasticity, we can infer that different market stimuli may yield different market behaviors. As such, we’re interested in the forward probabilities related to the current signal at hand, which is the 2-8-D sequence; that is, in the past 10 weeks, MBLY stock printed two up weeks and eight down weeks, with an overall downward slope.
Following this signal, the forward returns of Mobileye stock are likely to range between $10 and $16, with price clustering prominent at around $12.50. Stated differently, a 9.17% positive variance exists between the two distributions, representing a potential structural arbitrage.
What’s also fascinating is the shape of the 2-8-D sequence’s probabilistic mass. Basically, it’s “heavier” on the right-hand side, which means that empirically, MBLY stock is likely to lean bullishly. To be clear, this bullish lean is not guaranteed. Plus, because the sequence itself is extremely rare, we should be careful about excessive speculation. Nevertheless, the shape of probabilistic mass is a key reason why we must perform calculus to better understand a security’s risk-reward profile.
Armed with this information, the one trade that arguably makes the most sense is the 12/13 bull call spread expiring January 16, 2026. This wager requires two simultaneous transactions: buy the $12 call and sell the $13 call, for a net debit paid of $39 (the most that can be lost).
Should MBLY stock rise through the second-leg strike of $13 at expiration, the maximum profit is $61, a payout of over 156%. Breakeven lands at $12.39, which is just about where the underlying probability density is thickest.
Is Mobileye a Good Stock to Buy?
Turning to Wall Street, MBLY stock has a Moderate Buy consensus rating based on eight Buys, six Holds, and one Sell rating. The average MBLY price target is $18.27, implying ~56% upside potential over the next 12 months.
Applied Math Reveals MBLY Stock Option Play
The equities market is one of the most complex systems in existence, which means any framework that claims to explain its movements must be equally sophisticated. By deploying an advanced quantitative model grounded in probability theory, stochastic processes, and calculus, we can estimate not only where MBLY’s stock price is likely to cluster under specific market conditions but also the underlying geometry of its probabilistic structure.
This level of insight provides a substantial edge over participants who rely on simplistic or outdated analytical methods, enabling more informed positioning and more resilient decision-making in an inherently uncertain environment.