In the words of a certain Starship captain, “Engage!” Today, we’re diving into the exciting universe of LiDAR technology and its potential to energize your investment portfolio. Once the stuff of sci-fi dreams, LiDAR—short for Light Detection and Ranging—is now leading the charge in industries ranging from self-driving cars to industrial automation. But while the Teslas and Waymos of the world dominate the headlines, small-cap LiDAR stocks are quietly beaming up the profits for savvy investors who know where to look.
If you’re ready to explore some of the lesser-known stars of the LiDAR world, buckle up. These five small-cap companies could be the engines powering the next wave of technological innovation—and your portfolio gains.
Why LiDAR Is the Next Big Thing in Tech
LiDAR technology uses lasers to measure distances with incredible precision, creating detailed 3D maps of environments. Originally developed for aerospace and defense, it’s now a cornerstone of cutting-edge applications like autonomous vehicles, drones, augmented reality, and even smart cities.
The numbers don’t lie: the global LiDAR market is expected to grow at a compound annual growth rate (CAGR) of 20.1%, reaching a valuation of $6.71 billion by 2028. With industries worldwide investing heavily in automation and sensing technologies, the demand for LiDAR is only going to skyrocket.
Why small-cap stocks? Unlike large-cap companies that may already be priced for perfection, small caps offer higher growth potential as they carve out niches in this burgeoning market. But remember—high reward often comes with high risk.
How to Evaluate Small-Cap LiDAR Stocks
Investing in small-cap stocks requires a keen eye and a solid strategy. Here’s what to look for when evaluating small-cap LiDAR companies:
- Technology Differentiation: Does the company offer something unique, like advanced software integration or low-cost manufacturing?
- Partnerships and Contracts: Collaborations with major automakers or government agencies can signal long-term growth potential.
- Revenue and Growth Metrics: While many small caps may not yet be profitable, a strong upward trajectory in revenue can be a promising sign.
- Market Penetration: Is the company targeting high-growth industries like automotive or defense?
Of course, small-cap stocks are known for their volatility. But with a diversified approach, you can mitigate risk while positioning yourself for potentially astronomical gains.
Early Innovators
AEye Inc. (LIDR)
AEye is a pioneer in adaptive LiDAR systems, designed to enhance autonomous vehicle performance. Their innovative software-defined LiDAR adjusts in real-time to optimize data collection, making it more efficient than traditional systems. With partnerships like Continental AG and contract wins in the defense sector, AEye is shaping up to be a key player in automotive and beyond.
Quanergy Systems (QNGY)
Quanergy focuses on LiDAR solutions for industrial automation and smart cities. Its unique 3D sensing technology is already being used in applications like perimeter security and traffic management. While it’s a high-risk play due to its small size, the company’s growing customer base hints at strong future potential.
Rising Stars
Luminar Technologies (LAZR)
Though technically bordering on mid-cap territory, Luminar is worth mentioning for its incredible growth trajectory. Its focus on automotive-grade LiDAR has landed partnerships with big names like Volvo and Mercedes-Benz. Luminar’s scalable production model and growing revenue make it a standout choice for investors.
Innoviz Technologies (INVZ)
Innoviz is gaining traction with its automotive LiDAR products, having secured partnerships with BMW and other global automakers. Its cutting-edge perception software adds a significant edge, enabling vehicles to process and react to real-time data. Investors looking for a mix of innovation and stability might find Innoviz intriguing.
The Wild Card
Ouster (OUST)
Ouster is the scrappy underdog of this list, targeting diverse industries like robotics, industrial machinery, and drones. Its innovative digital LiDAR architecture enables scalable production at a lower cost compared to competitors. While Ouster is a speculative pick due to its financials, its broad market applications and recent mergers position it as a potential breakout star.
Beam Up Your Portfolio
LiDAR technology is no longer the future—it’s the present. As industries increasingly adopt this revolutionary tech, small-cap LiDAR stocks are becoming a hotbed of opportunity for forward-thinking investors.
While these stocks come with inherent risks, their potential to deliver out-of-this-world returns is hard to ignore. Remember to conduct thorough research and diversify your investments to manage volatility.
Ready to boldly go where no portfolio has gone before? These small-cap LiDAR stocks might just light the way.