MicroVision, Inc. (NASDAQ:MVIS) has been quietly churning out high tech imaging and laser scanning technology for years. But MVIS stock began to soar last fall on news it was developing a lidar system for the automotive sector.
Between the start of December 2020 and Feb. 16 of this year, MVIS stock rocketed up by more than 920%. After a quick correction, it’s surged several times since, hitting a decade-long high close of $26.44 on April 26.
That’s classic meme stock performance. However, MicroVision does have a shot at a big win in a huge industry. At its current price in the $15 range, is MVIS stock worth considering for your portfolio?
Lidar Versus Relying on Cameras
Much of the drama around MVIS stock has been a direct result of Tesla (NASDAQ:TSLA). There is a, “Will they or won’t they?” element to this. Tesla is the leading electric car manufacturer — but more importantly in this context, it’s seen as a leader in the race to autonomous cars.
Tesla CEO Elon Musk has repeatedly dismissed lidar. He’s called it a “crutch” and “a fool’s errand.” In 2019, he told attendees at Tesla’s first Autonomy Day Event, “Anyone relying on lidar is doomed. Doomed!”
One of Musk’s key complaints about lidar is its expense. Prices have come down, but early in the autonomous car race, a lidar system for a single vehicle could cost $70,000.
Tesla has been betting that camera-based systems have improved to the point where they can match lidar’s depth-sensing lasers. However, a very public series of crashes by Tesla vehicles on Autopilot raised questions about this approach.
While Elon Musk may still be trashing lidar publicly, it seems that behind the scenes, Tesla is experimenting with adding lidar to its Autopilot sensor suite. There have been multiple reports over the past six months of Tesla vehicles equipped with prominent lidar sensors.
A big part of the MVIS stock story in 2021 has been retail investors reacting to discussions on the subject by Reddit users on r/WallStreetBets. So yes, MVIS has been a classic meme stock. But MicroVision would obviously benefit if Tesla were to start using lidar sensors.
For example, MVIS stock saw one big spike in February, which was assisted by this Medium post that suggested it could “skyrocket” over the next few years. The author wrote that the company may have game-changing technology that would be the perfect match for Tesla.
MicroVision’s Cheap Lidar Has Competition
MicroVision’s pitch is effective lidar sensors that are cheap enough for automakers — even Tesla — to adopt them. The company says its lidar system will meet or exceed original equipment manufacturer (OEM) requirements. Additionally, it will do so with an average selling price (ASP) of less than $1,000.
That’s a far cry from the days of a $70,000 lidar system. MicroVision — and its investors — are banking on the price being low enough to win over automakers.
But there’s one fly in the ointment here. MicroVision isn’t the only one developing a cheap lidar system. In fact, a leading competitor has already announced a $500 lidar system.
That means MicroVision will be introducing its first automobile lidar sensor while going up against an established company whose system could seriously undercut it. Even worse, the lidar system Tesla has been testing on the road is apparently manufactured by this competitor.
Of course, Tesla is far from the only game in town. But having the company adopt your lidar system for its cars is a big win that’s likely to influence other car makers.
The Bottom Line on MVIS Stock
This Portfolio Grader “B”-rated stock could be a long-term growth winner. MicroVision has other products that have potential, including components used in AR glasses.
However, the real win would be chalking up a contract to supply automakers with a lidar system. That is a huge market. When the company reported its second-quarter earnings on Aug. 4, it said the system would be available in limited quantities in Q4.
Additionally, it had this to say about its system and automakers:
“The feedback we’ve received from potential customers so far has been very positive. With our proprietary active scan locking architecture based on proven technologies, we believe our lidar meets and exceeds their product expectations and will be the most cost effective lidar product to address their needs.”
If you decide now is the time to make a move, keep in mind that as a meme stock, announcements — by MicroVision, competitors, Tesla or other auto makers — could have an oversized effect on MVIS stock. Be prepared for ongoing drama.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
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