The Self-Driving Revolution has arrived.
What was once purely a science fiction concept, is increasingly turning into a reality thanks to the convergence of multiple breakthrough technologies that are enabling cars to safely and effectively drive themselves.
The biggest of these breakthrough technologies is something called LiDAR – which are add-on, laser light sensors that essentially give cars the power of “vision” through advanced perception sensing tech.
These LiDAR sensors are the foundational technology of self-driving, and as such, will be ubiquitously adopted in the next-generation of self-driving “smart” cars.
Today, very few vehicles have LiDAR sensors. By 2030, every car, truck, train, and bus in the world will have LiDAR sensors.
That’s why the LiDAR market is expected to grow from just $3 billion in 2020… to $42 billion by 2030.
Dozens of startups have emerged over the past several years looking to capitalize on this LiDAR demand boom. They’re all attacking the market with unique technologies, value props, and designs – and while not all of them will win, this market has more than enough potential to produce multiple big winners.
That’s why we think the best way to play the Self-Driving Revolution is by making several “small bets” on multiple different LiDAR companies – with the idea being that a few of them are going to win big, and more than offset losses from the ones that go belly-up.
Today, we are going to tell you about yet another LiDAR maker that is attacking the self-driving problem with a unique AI-powered LiDAR solution that represents one of the more interesting technological approaches in the LiDAR market. If this AI-powered LiDAR solution gains traction, this stock could end up being the Self-Driving Revolution’s biggest winner.
Using AI to Make High-Performance, Low-Cost LiDAR Solutions
Traditionally, making high-performance LiDAR sensors has been a hardware challenge. That is, in order to make LiDAR sensors see farther, at higher resolutions, and with better object detection abilities, LiDAR makers have simply added more lasers, scanners, and receivers to their systems.
That’s why some LiDAR systems feature over 100 lasers, scanners, and receivers.
Of course, the problem therein is that – while such a LiDAR system will likely feature industry-leading range and resolution – it will also feature industry-high costs, and is therefore not a reasonable solution to the self-driving problem.
That’s where AEye steps in, a self-driving technology company that is going public through a SPAC merger with CF Finance Corp. III (CFAC).
AEye has turned the hardware challenge of making high-performance LiDAR systems into a software challenge.
The company’s LiDAR system has one low power laser, one scanner, and one receiver. It’s as simple as it gets in terms of LiDAR systems, and by extension, as cheap as it gets, too. AEye’s signature 4Sight LiDAR clocks in an estimated 2X to 5X cheaper than any other high-performance LiDAR.
Yet, it doesn’t compromise on quality. At all. It features industry-leading range, resolution, field-of-view, and interference mitigation.
What’s the secret?
AEye’s AI-powered software.
The company integrates its signature iDAR – or intelligence detection and ranging software – into every LiDAR system. This iDAR software incorporates AI-powered edge intelligence algorithms to identify and focus on relevant objects.
In other words, instead of creating hundreds of lasers and sensors to increase LiDAR performance, AEye has created robust AI-powered edge intelligence algorithms to do all the work.
They’ve turned a hardware problem… into a software problem.
And in so doing, AEye has figured out how to make high-performance commercial LiDAR systems at unbeatable prices.
To be sure, AEye has yet to prove this technology breakthrough at scale – but if the theory holds, then this AI-powered LiDAR system is a totally game-changing solution.
Plus, relative to many of its LiDAR peers, AEye is very reasonably valued. AEye’s enterprise value is $2 billion, which represents just a 5.9X multiple on 2026 projected EBITDA.
Luminar, Velodyne, and Aeva are all worth much more than that – and are trading at 10X-plus 2025 projected EBITDA.
So, with AEye, you have a unique LiDAR maker with a potentially game-changing AI-powered software solution, that is currently trading at a big discount to peers.
That’s why, if you’re looking for more exposure to the Self-Driving Revolution, you should consider taking a position in AEye stock today.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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