Why Aurora Innovation Stock Shot Higher This Week
Key Points
Aurora Innovation launched a new partnership with Volvo on a self-driving truck route in the United States.
The company is barely generating any revenue today.
With a market cap above $10 billion, the valuation is demanding today.
Shares of Aurora Innovation (NASDAQ: AUR) shot up 16% this week, according to data from S&P Global Market Intelligence. The autonomous driving technology company posted earnings this week and announced a new route for its semi-truck partnerships.
Aurora Innovation's stock is up 80% this year. Here's why the stock was soaring yet again this week, and whether now is a great time to buy this red-hot stock.
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Earnings release and new partnerships
Autonomous vehicles are growing in popularity across the United States, and Aurora Innovation is trying to get in on the trend. However, instead of serving passenger drivers, Aurora is looking to win contracts for self-driving routes for long-haul trucks.
It is still in the early stages, but it just launched a new truck route with Volvo between Dallas and Oklahoma City. The opportunity in self-driving trucks is massive, with millions operating in the United States at any one time. By the end of 2026, management aims to have 200 trucks in its fleet and $80 million in run-rate revenue. In the first quarter, it only generated $1 million in sales and lost $244 million, making this an audacious goal.
Image source: Getty Images.
Time to buy this hot stock?
Aurora is an interesting business opportunity, but the stock is much too expensive today. Shares trade at a market cap of $13.66 billion, which would be expensive even if it had 10,000 trucks in operation. That is many years away, if it ever gets there. Avoid chasing Aurora Innovation stock; leave it on the sidelines for now.
Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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