What happened

Shares of lidar-sensor maker Luminar Technologies (NASDAQ:LAZR) were on the rebound on Wednesday morning, trading higher after it clarified the details of its deal to sell lidar units and software to Intel (NASDAQ:INTC) subsidiary Mobileye.

As of 10 a.m. EST, Luminar's shares were up about 10.3% from Monday's closing price.

Luminar's stock price got clobbered on Tuesday after Reuters reported that the CEO fo Mobileye, a key Luminar client, said that his company might develop its own lidar units in-house.

Understandably, that report led to concerns among Luminar investors. But it turns out it was something of a false alarm. In a statement released before the market opened on Wednesday, Mobileye and Luminar clarified that they are still very much doing business together, and there's no plan to change that.

Luminar's Hydra lidar system was developed from the start for automotive applications. Image source: Luminar Technologies.

Specifically, Luminar is still providing its technology to Mobileye's autonomous-vehicle program, which is aiming to launch a Level 4 self-driving taxi service in 2022. The companies, which have been working together for nearly two years, signed a deal in November in which Luminar agreed to supply lidar units to Mobileye at a price of less than $1,000 each once production is up to scale.

To sum up: Yes, Mobileye is toying with developing its own lidar units in-house. But it's not a definite thing, those units wouldn't be ready before 2025, and Luminar is and will continue to be Mobileye's lidar supplier in the meantime.

I think auto investors are right to view Luminar as one of the top lidar companies in the automotive space as of right now -- and to view lidar as a technology that's critical to self-driving vehicles as well as to the next generation of advanced driver-assist systems.

This is a hot industry, the competition is fierce, and Tuesday won't be the last time that a lidar stock makes an abrupt move up or down on breaking news. Investors who keep that in mind -- and stay focused on the larger picture -- could do well here.

Read more from the original source:

Why Luminar Technologies Stock Jumped This Morning - The Motley Fool