What’s Happening With AEye Stock?

AEye stock (NASDAQ: LIDR) had a solid July, rising by close to 240% over the month, although the stock has retraced by about 12% over the last five trading days. AEye develops adaptive LiDAR (light detection and ranging) systems used to enable advanced driver-assistance systems (ADAS) and autonomous driving capabilities. So what’s been driving the surging investor interest in this micro cap name?

Regaining Listing Compliance

The company regained compliance with Nasdaq’s minimum bid price requirement in late July 2025, after its stock closed at or above $1.00 for 10 consecutive trading days. This likely boosted investor confidence, following a compliance notice from the exchange in March that required the company to raise its share price to maintain its listing on the exchange. Trading volume has also increased meaningfully over the past month.

Nvidia Collaboration

AEye announced that its flagship Apollo lidar sensor has been integrated into Nvidia’s DRIVE AGX offering, which is a widely used hardware and software platform designed to enable autonomous and semi-autonomous driving capabilities. DRIVE AGX serves as the computing backbone for many global automakers developing smart and self-driving vehicles, offering high-performance AI processing, sensor fusion, and real-time decision-making capabilities.

By integrating with this platform, AEye gains access to an influential and growing ecosystem of OEMs and Tier 1 suppliers working on autonomous vehicles, ranging from Level 2 driver-assistance systems to fully autonomous Level 5 vehicles. The partnership also helps AEye gain technical validation and visibility without having to independently spend heavily on sales or marketing, helping to reduce customer acquisition costs. Separately, AEye is also expanding its product offerings. The company recently launched OPTIS, its new physical testing system for lidar sensors.

Worth The Risk?

There are several risks as well. AEye is still a very early stage company. It generated just $64,000 in revenue last quarter and total sales over the last 12 months declined 71% to just $240,000. This means that the stock trades at a massive price-to-sales ratio of 314x, in contrast with a 3.1x multiple for the S&P 500. Operating losses are also deep, with a trailing operating loss of $32 million and no near-term line of sight to profitability. This high level of cash burn is a risk for the company.

Although the Nvidia tie-up is promising, it doesn’t guarantee commercial orders or long-term adoption since the deal is not exclusive. Nvidia works with several other lidar partners. For now, the deal offers AEye access, but that could eventually translate into revenue. Investors chasing the rally should remain cautious as AEye is a highly volatile microcap stock with a market cap of just about $70 million.

While you would do well to be cautious about LIDR stock for now, you could explore the Trefis Reinforced Value (RV) Portfolio, which has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to produce strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid- and small-cap RV Portfolio stocks provided a responsive way to make the most of upbeat market conditions while limiting losses when markets head south, as detailed in RV Portfolio performance metrics.