Late last year, Microvision (NASDAQ:MVIS) announced plans to enter the automotive lidar business, which kicked off an incredible run-up in the price of MVIS stock.
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At the time it was trading for penny stock prices (around $3 per share), but soon made its way to between $5 and $10 per share. Then, in February, as the meme stock trend took off, retail traders dived into it with full force.
In turn, the stock zoomed even higher, climbing to above $20 per share in February — prices it hadn’t seen in more than decade. After pulling back to around $10 per share during the spring, meme rallies in April and June briefly sent it back above the $20 price level.
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Unfortunately, since then, it hasn’t been getting much of a meme boost. Traders have been cashing out, opting to chase new short-term opportunities.
With this in mind, should you skip out on it as well? Not necessarily. With its low-cost, but high-quality lidar system, it stands to grab a piece of this fast-growing market. Once it makes progress with its lidar endeavors, this former meme favorite should see a tremendous rebound in price.
MVIS Stock and Its Lidar Catalyst
Lidar, or laser radar, is a sensor technology that can be used to facilitate self-driving capabilities in automobiles. As the auto industry is accelerating its move into AVs, or autonomous vehicles, demand for this technology is on the rise.
At first glance, it may seem odd that Microvision, which has been around for decades, is all of a sudden getting into this business. Especially as several companies have already established themselves in the automotive lidar industry.
But given its background in laser-scanning technology, moving into this space is a natural move for it. Not only that, the company has demonstrated that it has developed a high quality system. With high resolution, full velocity and long-range, it stands to become a formidable competitor to the established names.
Of course, as seen from the slide in the price of MVIS stock over the past few months, potential alone isn’t enough anymore. Instead, investors, including the meme crowd, are waiting for further progress before jumping back into shares. However, once this happens? It may not take long for this stock to get back toward its past highs.
Hitting Its Next Milestone Will Likely Send It Soaring Again
Microvision’s automotive lidar catalyst is going to take years to fully play out. But that doesn’t mean the stock is going to sit idle until the true “payoff” moment is reached.
Instead, once it hits its next milestone, MVIS stock will more than likely get out of its current rut, and back toward higher prices. Based on the wild moves it made earlier this year? It wouldn’t be surprising if the meme crowd jumped back into it with full force. Chances are, this would result in an outsized move, perhaps back to prices above $20 per share.
What’s the next milestone it needs to reach? Entering a partnership, or a supply deal, with a major automaker. So far, such game-changing news has yet to be announced. But it’s clearly moving in the right direction. At least, that’s the takeaway from CEO Sumit Sharma’s interview with InvestorPlace Markets Analyst Joanna Makris on Oct. 21.
In the interview, Sharma discussed that, following the company’s presentation at the IAA Mobility auto show in Munich, he feels “more confident about [the company’s] path than ever before.” Going into further detail, Sharma stated his belief that the product Microvision presented to the industry “meets and exceeds what [auto makers] wanted.”
The Verdict on MicroVision
Admittedly, it’s going to take more than encouraging remarks from its CEO to get Microvision shares back on an upward trajectory. As I mentioned above, investors and traders have already bid up the stock on potential. To send it higher again, they need to see results.
However, I wouldn’t discount the possibility that the next bit of game-changing news arrives in the coming months. As it has developed a lidar product that meets and/or exceeds expectations, and is cost-effective to boot? This company stands to beat out its more established rivals, and lock down partnerships/supply deals with major automakers.
That said, keep in mind this is a high risk play. Priced entirely on its lidar potential, and not its current operating performance, any sort of setback could mean an outsized move — in the wrong direction.
You may want to consider MVIS stock while it remains on the meme crowd’s back burner. That is of course if you can stomach the volatility, and are bullish on its prospects of making a name for itself in the fast-growing lidar space.
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.
The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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