Mobileye deal makes Intel the clear leader in self-driving cars, says analyst

While Alphabet's Waymo battles Uber over allegations of stolen intellectual property, Intel's $15 billion acquisition of Mobileye puts it ahead of the competition, said SunTrust analyst William Stein on CNBC's "Closing Bell."

"This deal establishes Intel as the clear leader in the autonomous driving and advanced driver assistance systems market," he said.

Mobileye has 60 percent of the advanced driver assistance system (ADAS) market which will increase to 70 percent over the next two years as they ramp up a deal with Volkswagen, said Stein.

"It's one of the most attractive markets within the semiconductor industry and its growing very quickly, so it could be potentially a very good deal for Intel," said Stein, who covers both stocks. Prior to the deal, Stein had a Buy rating on Mobileye and a Neutral rating on Intel, he said.

The market is taking a muted view of the deal because Intel doesn't have a great track record with acquisitions, but this time it could be different since Intel will allow Mobileye to operate independently, he said. The company will place the cash it had allocated towards developing autonomous technology in the hands of Mobileye, he said.

Though some view the price tag as expensive, this is "a reasonable use of cash," as it will get Intel where they want to be in autonomous driving much more quickly than had they built the technology in-house, he said.

The deal is unlikely to impact Intel's margins, since Mobileye which is essentially a software company, has "pretty robust gross margins," he said.