Luminar Technologies (LAZR Quick QuoteLAZR - Free Report) , the mid-cap provider of LIDAR (light detection and ranging) systems for autonomous vehicles, will report its Q3 results today after the closing bell.

With only one major car maker as a customer, Volvo, annual sales for Luminar were only projected to cross $45 million sometime next year.

But that slow growth trajectory may have changed on Tuesday when another big partner gave their systems one of the biggest nods of all.

On Tuesday, in the midst of NVIDIA's (NVDA Quick QuoteNVDA - Free Report) GPU Tech Conference, it was announced that Luminar's lidar technology was selected for NVIDIA DRIVE Hyperion Autonomous Vehicle Reference Platform.

We knew to expect fireworks from Jensen & Co. at the GPU Tech Conference which got rolling in Europe overnight.

But I did not see knighthood being bestowed on our LAZR by the Wizard of NVIDIA! We have owned shares of LAZR in my TAZR Trader portfolio since the summer.

LAZR gapped up over 35% on the news to nearly $24 and the volume was bigger than the 67 million share days we saw last December when word of the Volvo contract launched the stock above $45.

But the stock could barely hold above $20 by the close. And there's plenty of sellers up here for two basic reasons.

First, there's a lot of folks who own the stock from much higher looking to get out, or lighten up.

Second, the stock is ridiculously overvalued as a mid-cap with only $46.5 million in sales projected next year. We expect to see estimates move higher after the NVIDIA blessing, but who knows what analysts will model and how.

I think the heavy lifting first has to be done by the NVDA analysts who will have to model how many Hyperion systems might be sought -- under different scenarios -- by auto OEMs for 2024 production vehicles.

The NVIDIA Shift to Full-Stack ADAS

Long-time followers know I love NVDA for its total system solutions for developers of all sorts of high-tech architectures. It's the CUDA hardware + software stack we've come to know and love for any industry data, research, or automation need and for countless scientific pursuits where large data sets must be modeled and simulated in real time.

Well, as Jensen has been building their ADAS (advanced driver assistance systems) capabilities, they initially didn't want to build everything for the auto makers.

NVDA of course made the computing chips and software systems for autonomous vehicles. But the company mostly left up to car makers the selection and integration of the various sensors that help a vehicle perceive its environment.

On Tuesday, Jensen expanded the vision by selecting a variety of sensor partners for a complete ADAS system, including those from Hella, Valeo FR, Continental AG, and Sony Group. Automakers will still be able to choose other sensors, but NVDA will ensure the ones from its partners work well with its chips and software.

And in a Reuters story this morning, the first name mentioned, in the very first sentence, was our little luminous leader...

"NVIDIA on Tuesday said it was partnering with a range of self-driving sensor companies, including lidar firm Luminar Technologies (LAZR Quick QuoteLAZR - Free Report) , to put together a system that automakers can use for driver safety features as soon as 2024."

And Luminar CEO Austin Russell was quoted in that article with this succinct explanation of the NVDA shift that could make his company very successful...

"It really doesn't make a whole lot of sense for every OEM to try and develop their own software stack from scratch. I think Nvidia will see a lot of success here because there's someone OEMs can depend on to deliver the right stack without having to spend tens of billions of dollars to get there."

Why Self-Driving Cars Are So Important

I know many people who aren't ready to give up driving their own cars. And no one will be asking them to for at least another decade.

So what's the rush to full-autonomous vehicles? For me, it all goes back to Mobileye.

I was first educated by Mobileye (MBLY) in 2015 with their philosophy that different types and levels of Advanced Driver Assistance Systems (ADAS) technology could save many thousands of lives each year.

The Israeli engineers knew that a wave of public and governmental safety demands could make one component after another viable.

The first and biggest example was Automatic Emergency Braking (AEB). Why? Because the number one automobile accident with the most persistent and devastating consequences is the rear-end collision.

It takes the most lives and delivers the most permanent disability to survivors. And how did these terrible accidents go up in volume in the past decade?

You guessed it -- texting drivers! To wit, I have an old-timer Harley buddy who hung up his spurs because the danger has just become too great for old-school V-cycle jockeys. My older brother still takes his chances on his.

So the MBLY approach -- before Intel (INTC Quick QuoteINTC - Free Report) bought them for $15B -- was to invest in the idea that eventually regulators around the world would get ADAS religion and push laws into the books for auto makers to enforce these controls -- with cameras (the MBLY model) or LIDAR (the LAZR model), or any combination thereof.

While all the hype the past 5 years has been about the path to Tesla (TSLA Quick QuoteTSLA - Free Report) , Google, Uber and Lyft "driver-less" cars -- which no American was ready for -- the simple AEB path to sneak in major safety automation was overshadowed by a "big brother is going to take my keys!" fear.

Thus, the path to driving safety has been much slower than I imagined in the past decade.

And this has nothing to do with enforcing a car/phone monitor -- a potential privacy invasion -- to eliminate driving distraction.

AEB is just the simplest, most life-saving feature to implement immediately, if only safety regulators and insurance companies stood up and grabbed the wheel.

Granted, I'm thankful that many vehicles produced in the past 5 years have many warning features about vehicles ahead -- or on the side for the second most dangerous highway event: the lane-change collision at 70mph for those who don't do at least one shoulder check!

Could We Have Done More By Now?

In fact, I dare say that those most afraid of having their "car turned into a robot" could have had more say if we had adopted features like AEB years ago, and others at a more gradual pace -- while still giving the driver total and complete autonomy.

Once Elon Musk and Google and Apple and NVIDIA and all the other geniuses working on fully-autonomous driving achieved their magnum opus, we might still have achieved fully-collaborative driving.

But, I'm not arguing against all these efforts that are commanding big cap-ex investment. As we've seen in semiconductors, software, and cars, there's nothing better for consumers and industry than geniuses competing.

Even Qualcomm (QCOM Quick QuoteQCOM - Free Report) is getting into the game with their recent purchase of Swedish automotive safety technology firm Veoneer. On October 4, Qualcomm and investment group SSW Partners said they would acquire Veoneer for $37 per share in an all-cash transaction.

At closing, SSW said it would sell Veoneer’s Arriver technology -- an ADAS stack that includes sensors and software -- to Qualcomm and retain the Swedish company’s other Tier 1 automotive supplier businesses.

One Analyst Who Nailed It

After Luminar reports tonight, I'll be looking forward to the questions and reactions of one analyst in particular.

When I first started learning about Luminar last summer, there was one analyst who provided consistent commentary and research: Gus Richard from Northland Capital Markets.

Here's what he wrote in July...

LAZR Acquires OptoGration Deepening it Moat Around Auto Lidar

Yesterday (July 19) LAZR acquired its detector supplier OptoGrations. OptoGrations' detectors are tightly integrated with LAZR signal processing ASIC and the combination is at the core of the Company’s hardware differentiation and its ability to meet Auto handsfree specifications at an affordable price. Acquiring OptoGration will simplify scaling its capacity from 1M/year to 10M/ year. Reiterate OP and $38 PT.

And here was his update in August...

LAZR the Lidar Leader: In our view, hands-free highway is the next milestone in autonomous vehicles, and to be safe they will require lidar. We believe LAZR is a leading LIDR supplier and will be the first to be in a production vehicle. We expect more production nominations this year. We update our estimates post earnings to include additional NRE revenue and higher expense associated. Reiterate our OP and $38PT.

Let's hope we see other i-bank analysts follow Richard's lead and coverage expands for Luminar.

Until then, here are some excerpts from the Luminar press release with a great quote from an NVIDIA Engineering chief...

Long-range lidar solution part of best-in-class sensor suite to help deliver safe, highly assisted and full self-driving capabilities

ORLANDO, Fla.–(BUSINESS WIRE)–November 9, 2021– Luminar Technologies, Inc., the global leader in automotive lidar hardware and software technology, announced today at the NVIDIA GTC conference that its lidar solution has been selected to be part of the sensor suite in the NVIDIA DRIVE Hyperion autonomous vehicle reference platform. This AI vehicle computing platform accelerates development of autonomous consumer vehicles with planned production starting in 2024.

By offering automakers a qualified, complete sensor suite featuring Luminar’s lidar solution, on top of NVIDIA’s centralized high-performance compute and AI software, DRIVE Hyperion provides everything needed to develop production autonomous vehicles.

DRIVE Hyperion will utilize one forward-facing long-range Luminar Iris lidar in its Level 3 highway driving configuration. Iris’ custom lidar architecture is designed to meet the most stringent performance, safety and automotive-grade requirements to enable next-generation safety as well as assisted and autonomous driving on production vehicles.

“NVIDIA has led the modern compute revolution, and the industry sees them as doing the same with autonomous driving,” said Austin Russell, Founder and CEO of Luminar. “The common thread between our two companies is that our technologies are becoming the de facto solution for major automakers to enable next-generation safety and autonomy. By taking advantage of our respective strengths, automakers have access to the most advanced autonomous vehicle development platform.”

“Our collaboration with Luminar bolsters the DRIVE ecosystem of companies that are focused on building best-in-class technologies for enabling autonomous driving functionalities,” said Gary Hicok, Senior Vice President of Engineering, NVIDIA. “Luminar is pioneering a unique, scalable solution that complements the NVIDIA DRIVE Hyperion platform.”

Bottom line on LAZR: Wait for tonight's report and see if the company offers any lift in their revenue outlook and new details on the partnerships with NVIDIA, Volvo and other OEMs. Either we get to buy more shares in the upper teens, or it's off to the races above $22.