Mobileye (Nasdaq: MBLY) is on watch Tuesday following reports that Tesla (Nasdaq: TSLA) CEO Elon Musk visited the company recently to evaluate key components being made by Mobileye for the automaker.

Israel's Globes said that the visit was to demonstrate several breakthrough developments from Mobileye which were installed on a trial Model S.

Globes commented, The system Mobileye is developing for Tesla is the first of its kind in the world, and it combines several advanced technologies that enable the vehicle to identify its environment, avoid obstacles, and move without driver intervention.

One of the key Mobileye components is DNN, which stands for digital neural network. This system allows the vehicle to "learn" about its environment by gathering data as it is in motion. Several factors of DNN include the ability to identify areas without defined objects and to create "holistic" paths via prediction.

It wasn't made clear whether this tech would be limited to the Model S and/or Model X, or potentially be implemented on the upcoming Model 3.

Shares of Mobileye are up over 2.5 percent.