JPMorgan initiates coverage of Luminar, Innoviz, and other lidar stocks

Yahoo Finance Live anchors discuss JPMorgan initiating coverage of Luminar, Innoviz, Cepton, and Velodyne.

Video transcript

[AUDIO LOGO]

JULIE HYMAN: And then we're also watching LiDAR companies. That's after JPMorgan initiated coverage of stocks, including Luminar and Innoviz, saying the space is, quote, "well-equipped for revenue opportunities outside of automotive."

Now, to remind you LiDAR stands for Light Detection And Ranging. Basically, it uses lasers for navigation. It has mostly been used with navigation for things like autonomous driving development. And so Luminar, we've spoken to the CEO Austin Russell pretty frequently here, and Innoviz are two of the names within that group here.

And JP Morgan expects a strong revenue ramp in the second half of this decade, led by an industry-leading order book size, in the case of Innoviz. And in the case of Luminar, JP Morgan predicting, it'll likely be the largest pure play LiDAR supplier by the end of the decade. So it's predicting it'll be the leader there.

BRAD SMITH: Yeah, there's a ton of movement forward here, especially as you're seeing a ramp in the number of electric autonomous vehicles that are being tested for open roads, whether that's everything from trucking and the semi-trucking, specifically, but then even further down to the end consumer vehicles, just, you know, a regular sedan that we may be whipping around in the future here.

And so in really getting that full self-driving-- and full self-driving, of course, that is its own debate in itself. But with all of the technology that's required for that to actually happen, the LiDAR technology companies have been getting a ton of recognition or at least attention because of this larger debate around LiDAR versus radar. What's actually detecting in 2D versus 3D.

JULIE HYMAN: Cameras are also in that--

BRAD SMITH: Right

JULIE HYMAN: --mix, too, when it--

BRAD SMITH: Right.

JULIE HYMAN: --comes to this navigation.

BRAD SMITH: Yeah. So there's really so much of the innovation within this technology that still, I think, has yet to come forward, because--

JULIE HYMAN: Yeah, it's still early days for all this stuff.

BRAD SMITH: --it's gonna be kind of case-based tested-- testing that needs to continue to move forward in order to ensure that it does have the safety mechanisms around it as well.

JULIE HYMAN: Right. A couple other stocks to mention here as part of this initiation, by the way Cepton, which is another LiDAR maker, was rated neutral at JPMorgan. And Velodyne was rated underweight. So that it is the laggard here is what JP Morgan says about this name. So those shares are actually down.

And then there's the company called Ouster, which is another in this space. And it is announcing it's cutting its workforce by about 10%. And cutting spending as well by over 15%. Those shares are down about 2 and 1/2% here this morning. It's also suspending sales of common stock. So all of that pushing those shares down a little bit.