Luminar Technologies (NASDAQ:LAZR) stock closed in the green today on news of an important partnership. A leader in the light detection and ranging (lidar) space, the company is joining forces with one of the auto industry’s most iconic brands: Mercedes-Benz (OTCMKTS:MBGYY).
Today, Luminar announced that it will provide Mercedes-Benz with its Iris lidar to help the auto giant “safely enable enhanced automated driving capabilities across a broad range of next-generation production vehicle lines.” The automaker will integrate this lidar into its vehicles by 2025.
Following the announcement, MBGYY stock fluctuated today while LAZR stock performed very well. This isn’t the first partnership news that Luminar has announced, but it may be the deal that pushes Luminar into a new chapter.
Does this strategic partnership make LAZR a stock to watch in 2023? Let’s take a closer look at what investors can expect in the new bull market experts are predicting.
What’s Happening With LAZR Stock?
Despite falling in pre-market trading today, LAZR stock has been rising steadily since Wall Street’s opening bell. Shares closed up by more than 28% for the day. Of course, Mercedez-Benz stock has been more volatile throughout the day. However, investors can attribute that to general market momentum more than the Luminar partnership.
If anything, this deal will likely boost the shares of both companies. In a press release published this morning, Luminar described the partnership as a “multi-billion dollar deal” with the potential to “substantially enhance the technical capabilities and safety of conditionally automated driving systems.”
For Luminar, this is a massive step forward, as it will allow the company to demonstrate the power of its tech with an industry-leading name. Mercedes-Benz has a truly global reach that spans several continents. This is also a likely win for the German automaker. As InvestorPlace has reported, there’s ample evidence to suggest that Luminar’s lidar is better for on-road safety than competing technology from companies like Tesla (NASDAQ:TSLA).
Luminar CFO Tom Fennimore firmly believes Luminar stands to grow as a result of this development. Fennimore told InvestorPlace:
“This expanded Mercedes partnership is a result of the great work the Luminar team has done over the past couple years after our initial win at Mercedes. It also continues the trend of significantly growing our business with existing customers as we execute and build trust with our partners.”
The Road Ahead
Investors shouldn’t overlook the key competitive edge that this new deal will give Mercedes-Benz. The company isn’t always ranked among automakers making progress in the driverless race. But as Seeking Alpha reports, use of Luminar’s Iris lidar will allow the company to advance its driver assistance technology and provide a new “conditionally automated driving system.”
As one of the world’s largest car companies, Mercedes-Benz already has an advantage over many competitors, including Tesla. Now, it will be able to expand its autonomous capabilities, making progress as one the few companies with a large global presence.
LAZR stock should also continue to climb as a result of the partnership. This news should remind investors that Luminar is helping lead the charge toward a driverless future.
On the date of publication, Samuel O’Brient did not hold (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.
