We recently published a list of 11 Best Lidar Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where Aeva Technologies, Inc. (NASDAQ:AEVA) stands against other best Lidar stocks to buy according to hedge funds.
The United Nations reports that approximately 1.35 million people die on the road annually, often due to human error. Despite various safety measures, accidents persist, driving the push for self-driving cars. These vehicles use Lidar (Light Detection and Ranging) technology to emit laser pulses, creating a 3D map of their surroundings in microseconds, allowing faster reaction times than human drivers.
According to S. N. Jha, the Principal Consultant at Fact.MR, Lidar sensors are very accurate, a fact that is driving the popularity of AVs. He writes: “Lidar sensors have been proven accurate in various autonomous driving technologies and, subsequently, are deployed in the automotive industry. Moreover, increasing expenditures in the development of numerous autonomous driving technologies are projected to stimulate the demand for Lidar sensors and scanners in multiple automotive applications in the coming 10 years.”
And there is plenty of evidence backing Jha’s assertions. Markets and Markets valued the Lidar market at $1.4 billion in 2023 and estimated that it would expand at an 18.2% CAGR between 2023 and 2029.
However, it is possible that the estimates are hugely conservative or do not expand their focus beyond autonomous cars. In recent years, some companies have developed concepts of autonomous drones and robots for use in logistics. Their goal is to get goods, especially in an e-commerce setting, from point A to B without a human in control. Besides reduced accidents, the “autonomous-ization” of logistics could lower operational costs for e-commerce companies, increase efficiency, and help them contribute positively to the battle against global warming.
ARK Invest estimates that companies in the autonomous logistics space could generate as high as $80 billion in revenue by 2026. This value may multiply exponentially to $920 billion by 2030. With all these different applications for Lidar technology cropping up, it is possible that no one is capable of doing justice to the potential of the Lidar market. We haven’t yet touched on how the increasing adoption of artificial intelligence (AI) is likely to boost demand for lidar technology. For instance, AI and large language models (LLMs) improve the processing and analysis of Lidar data, increasing the technology’s accuracy and safety.
Our Methodology
To compile our list of the best Lidar stocks to buy, we first researched extensively to identify companies with significant exposure to LiDAR technology. We defined exposure in terms of manufacturing Lidar products or components, developing Lidar-related solutions, or integrating Lidar tech into other products. We then analyzed these companies based on their hedge fund holdings in Q3 2024. The finalists are stocks with the most hedge fund interest.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A close-up of a LiDAR-on-chip sensor mounted in a consumer-grade electronic device.
Aeva Technologies, Inc. (NASDAQ:AEVA)
Number of Hedge Fund Holders: 5
You wouldn’t miss Aeva Technologies, Inc. (NASDAQ:AEVA) on the list of companies pushing the limits of lidar technology. This young company, founded in 2017 and listed last year, is already catching the eyes of institutional money. It develops what it calls 4D LiDAR sensors that can detect both position and instant velocity data.
Aeva Technologies, Inc. (NASDAQ:AEVA) was one of the headliners in the lidar niche at this year’s CES. The company took the opportunity to launch its latest 4D lidar sensor, Atlas Ultra. Atlas Ultra is designed for SAE Level 3 and 4 automated driving systems and provides up to three times the resolution of its predecessor. It also has configurable field views up to 150 degrees and a maximum detection range of 500 meters. The sensor’s 35% slimmer design makes it ideal for integration in passenger vehicles. In other words, Aeva Technologies is targeting the segment of autonomous vehicles that is likely to adopt lidar technology at a faster rate; that is, taxicab service providers such as Waymo.
The company is also aggressively pursuing autonomous truck technology. It recently partnered with Torc Robotics, a Daimler Truck subsidiary, to collaborate on this technology. Aeva estimates that this collaboration will enable the partners to commercialize autonomous trucks by 2027.
There has been substantial volatility in Aeva’s stock price in the past few weeks, but there is a steady recovery from the slump that happened just weeks after the IPO. The stock is up 41.96% in the past six months, and there is potential for a further rally. Craig-Hallum recently raised its price target on the stock from $5 to $6 while maintaining a “Buy” rating. According to the analysts, Aeva Technologies, Inc. (NASDAQ:AEVA) is entering a new phase of commercial progress with several recent wins. This is unlike most other lidar companies that have struggled this year.
Overall, AEVA ranks 10th on our list of best Lidar stocks to buy according to hedge funds. While we acknowledge the potential of AEVA as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AEVA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.