With the objective of providing a high-resolution 3D view of their environment, LiDAR (light detection and ranging) sensors are set to be a mainstay in autonomous vehicles.
While not all have been proponents of the technology – Elon Musk, for one, has stated in the past that he is not a fan – J.P. Morgan analyst Samik Chatterjee says the “debate around value-add of a LiDAR in a sensing suite has been long settled.”
The decision to forgo the use of lidar more revolves around costs rather than performance although the jury is still out on the “winning technology approach.”
That said, as far as Chatterjee is concerned, the answer is pretty clear.
“We believe the true differentiation remains in a high performance forward facing LiDAR capable of handling both L2 ADAS as well as L3+ highway autonomy allowing automakers to prioritize safety with ADAS while selling a premium option in L3 highway driving,” the analyst opined.
Against this backdrop, Chatterjee has picked up this thread, and followed it to the logical conclusion: pulling the trigger on LiDAR stocks that he sees as winners going forward. In fact, the analyst sees a particular pair of stocks delivering gains of more than 200% in the year ahead.
And turns out he’s not alone; using the TipRanks database, we can see that both are rated as Strong Buys by the analyst consensus. Let’s take a closer look.
Luminar Technologies (LAZR)
We’ll start with Luminar, one of the first lidar companies to go public back in December 2020, following a SPAC merger with Gores Metropoulos. The company has established itself as a leader in this nascent space with a focus on bringing to market mass-produced automotive-grade products without breaking the bank. The tech is designed with a wide remit in mind, suitable for both passenger vehicles and commercial trucks.
The company has been pivoting away from its legacy Hydra system to the more capable Iris and the auto industry has obviously been impressed. Luminar has already struck deals with various OEMs including such luminaries as Nissan, Volvo and Mercedes.