Laser-edge tech
At the heart of Luminar is the controversial lidar technology which uses lasers that bounce off surroundings to guide autonomous vehicles; allowing them to “see” where it’s going where traditionally cameras have been used to decode pixels to understand the world around them.

Like all innovative technology, it is not without its fair number off critics and lidar is no exception. While some see its short comings, either because of cost or their failure properly weigh its role in the space. Others remain convinced that as technology evolves, so will the prices come down making lidar increasingly attractive. Unlike traditional camera systems where processing is often the bottleneck and visibility is fixed to interpretive pictures placing a distance range of a hundred feet and subject to the elements, lidar can analyze far faster and further by extending to distances of up to 900 feet devoid of the weather.

Inked deals with automakers
Luminar has been busy securing contracts with companies from Volvo to Intel’s Mobileye, which should provide tailwinds to their revenue as the other manufacturers ramp up production in the space. Then there’s the investment from Daimler, announced in October which is clearly a juggernaut in the space. The key here is the time it takes to bring these systems into marketplace and there is our opportunity.

The excitement of IPOs
As a rule of thumb, we typically do not like to chase IPOs simply because often early investors are seeking to cash out their investment and pass that risk on to the public. For this reason, levels here become important as does the market place around the hype of AI. One needs look no further than the drawdown of Uber when they released, and subsequently their recent exit from the autonomous space to know these highly anticipated trendy buys can prove difficult to price.

The intersection of opportunity
In the end, the lidar market is expected to grow to $2.5 billion by 2025, and Luminar is leading the pack by positioning themselves to “drive” the driver-less auto industry into the future at scale.