Niche electronics company Ceva(NASDAQ: CEVA) has been an outperformer on the stock exchange of late, according to data compiled by S&P Global Market Intelligence. On Tuesday the company announced a licensing deal, and investors flocked to snap up its shares.

New licensing deal signed

Ceva is in the business of developing and licensing processing devices and software, and has lately attracted interest because of its artificial intelligence (AI) processors. On Tuesday, the company announced that it sold a license for a next-generation solution supporting advanced driver assisted systems (ADASes).

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Specifically, the license covers its NeuPro-M Edge AI Neural Processing Unit (NPU), and the client is South Korean vehicle tech company Nextchip.

Ceva described the Neu-Pro M as an "architecture designed to accelerate deep learning and machine learning workloads in a wide range of applications."

Ceva did not provide any financial details of the arrangement. In the press release touting the deal, however, it didn't hesitate to cite a forecast from Grand View Research that the worldwide ADAS market will grow at a compound annual rate of over 19% from 2023 to 2030. In the latter year, it should reach nearly $123 billion.

When the rubber meets the road

Signing off on a deal is well and good, but it's tough to estimate this one's potential impact on Ceva because investors don't (yet) have the financial particulars. They'll soon see if the recent excitement swirling around the company is justified by results; last week it set its first-quarter earnings release date. This is slated to occur on Wednesday, May 7.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Ceva. The Motley Fool has a disclosure policy.

Why Ceva Stock Was Accelerating This Week was originally published by The Motley Fool

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