Luminar Technologies Soars Today on Potential Trade Protections

Stocks Luminar Technologies (NASDAQ:LAZR) It rose as much as 17.9% in trading on Tuesday after news broke that the Biden administration proposed new restrictions on Russia and China vehicle softwareShares were up 15.4% by the close of the trading day.

New protections in the automotive sector

The US Commerce Department has proposed banning software for vehicles from China or Russia, as well as hardware that could enable autonomous driving. This would affect not just the US, but all of the world. automotive industryit is also the software that makes autonomous driving possible.

An arms race is underway in autonomous driving, with Chinese companies in particular aggressively developing their capabilities. But safety and economic concerns have led the US, Canada and Europe to impose hefty tariffs on Chinese vehicles, and that could now extend to software.

Can Luminar Technologies survive?

While this could potentially be good for autonomous driving companies in the US, it remains to be seen whether Luminar will be one of them. The company is not generating significant revenue and losses are accumulating for the company.

LAZR Revenue (TTM) By data YGraphics

Investors had hoped that the autonomous driving boom could boost the company’s finances, but falling costs in LiDAR and uncertainty about the target market as new technologies develop could lead to lower revenue and profits than previously expected.

While the ban on foreign technology is a positive development, it will likely result in a shrinking of the overall target market for Luminar’s products, and this combined with its weak financials is not good news for the stock in the long term.

Should you invest $1,000 in Luminar Technologies now?

Before buying Luminar Technologies stock, consider the following:

The Motley Fool Stock Advisor The team of analysts determined what they believed to be true Top 10 stocks 10 stocks that investors can buy now… and Luminar Technologies wasn’t one of them. The 10 stocks that made the cut could deliver huge returns in the years ahead.

Think about when you will think Nvidia we created this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, You would have $712,454!*

Stock Advisor provides investors with an easy-to-follow plan for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. Stock Advisor There is service more than quadrupled S&P 500 return since 2002*.

See the 10 stocks »

*Stock Advisor returns as of September 23, 2024

Travis Houm The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. disclosure policy.