Dear Sumit Sharma, Our Readers Have Serious Questions About MicroVision

·5 min read

MicroVision (NASDAQ:MVIS), which reports Q2 earnings next Tuesday, may be my favorite short-squeeze stock. It’s also a potentially game-changing technology company that’s working on lidar (light detection and ranging), autonomous vehicles and augmented reality (AR) products. That’s part of why I’m back in MVIS stock more recently.

Concept image of a self-driving car lidar system.
Concept image of a self-driving car lidar system.

Source: temp-64GTX/Shutterstock.com

Other Reddit stocks like Gamestop (NYSE:GME) should hold my beer for a minute. As a penny stock for the first half of 2020 and perennial r/WallStreetBets favorite, MicroVision shares have the ingredients to make a potentially delicious 1,000% juice.

In fact, there are three key reasons to be hyped for MVIS stock today:

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

  • First, 19% of the float is short. That makes MicroVision ripe for an easy squeeze.

  • Second, there are some big potential customers kicking the tires on MicroVision. Most notably, Microsoft (NASDAQ:MSFT) is in the mix. MSFT could be using MicroVision technology to deliver to the U.S. Army over 120,000 IVAS (Integrated Visual Augmentation System) devices based on its HoloLens augmented reality headset.

  • Third, MicroVision’s CEO, Sumit Sharma, has discussed a potential sale of all or part of the company.

But before hopping on the Lidar momentum train (🚀🚀🚀 MVIS YOLO 🚀🚀🚀), or any ‘mo train for that matter, please, dear reader, remember my views on momentum.

Know when to get off.

While MVIS stock closed as high as $26 in late April, fueled by enthusiasm for the company’s new lidar sample, it has since fallen almost 50%. MicroVision’s headquarters in Redmond, Washington may as well be Punxsutawney, Pennsylvania. After all, MVIS stock appears destined to repeat its own Groundhog Day rise-and-fall pattern.

But, this time could be different. MicroVision could be more than a simple squeeze. That’s because the company may be the “next big thing” in Augmented Reality (AR) and lidar. With MVIS scheduled to report Q2 earnings on Aug. 4, investors are on the edge of their seats.

So, Sumit Sharma, CEO of MicroVision, “InvestorPlace Nation” has some questions for you. We hope you’ll address these questions from our readers on next week’s call. We also hope for a follow up in our next Fireside Chat series to discuss lidar, autonomous driving and augmented reality in more detail.

MVIS Stock: MicroVision’s Relationship With Microsoft

Background: There is currently an AR smart glasses war going on between Microsoft, Facebook (NASDAQ:FB), Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG, NASDAQ:GOOGL). Microsoft is a long-standing customer for MicroVision’s Augmented Reality (AR) projector modules. These are being used for Microsoft’s HoloLens 2 (HL2) head-mounted mixed reality device. Microsoft plans future versions of the Hololens with the ultimate goal of smart glasses replacing smartphones.

Reader Question: Will MicroVision’s technology be the basis for Microsoft surface glasses?

Microvision claims it has the lightest and smallest display module for smart glasses worldwide. The tech could form the basis of a new Microsoft product line. Microsoft could potentially offer lighter and smaller smart glasses than Apple, for example.

Reader Question: Could Microsoft be interested in MicroVision’s AR division for new versions of HoloLens and/or launching surface glasses as a natural evolution of HoloLens?

Sumit has talked about strong interest from bidders in the augmented reality space to buy the AR product line or the whole company. And Microsoft and MicroVision have a long-standing business relationship.

Mixed Reality, the U.S. Army and IVAS

Background: The U.S. Army is exploring the use of Microsoft’s HoloLens technology in high-tech combat headsets in an effort to enhance situational awareness and capabilities for soldiers. The IVAS headsets would be used by soldiers to rehearse and train in more realistic scenarios using augmented reality to prepare themselves for actual combat. This is a big win for Microsoft. The deal could be worth over $21 billion over the course of ten years.

Based on MicroVision’s patent filings as well as a certain video, it can be deduced that Microsoft’s HL2 and possibly even the IVAS for the U.S. Army are using MicroVision’s light engine.

Reader Question: If you look at the product timeline on the MicroVision website, the gen 4 and 5 display engine are not included. Why not?

Reader Question: Is it possible the AR business is being sold? And if so, does that mean MicroVision will now focus purely on automotive lidar?

Lidar for Autonomous Vehicles

Background: With the exception of Tesla (NASDAQ:TSLA) lidar is viewed by most auto manufacturers as critical technology for advancing autonomous driving. Simply put, the technology sends out millions of pulses of infrared light. It then measures the time those pulses take to bounce off objects and builds a 3D map of the surrounding environment. Lidar captures objects that radar, sonar and image cameras miss.

MicroVision’s Sharma specialized in Lidar in his prior role at Google. He claims his company’s lidar technology will disrupt the market. MicroVision’s long-range Lidar sensor A-sample hardware was released in April of this year.

Reader Question: Could you provide an update on the company’s Lidar product? Have any automotive OEMs expressed an interest to include MicroVision’s lidar technology in their driver assistance programs?

MicroVision’s architecture features MEMS-based laser beam scanning technology, whereby beam deflection units are moved mechanically by mirrors. The company claims this architecture offers substantially lower cost over competing 1550 nm technologies, which require more expensive sensors, lasers and beam steering technologies. However, more recently, several new lidar companies like Velodyne Lidar (NASDAQ:VLDR) and Innoviz (NASDAQ:INVZ) are making 905 nm lidar products that they claim can substantially reduce costs.

Reader Question: Can you discuss the advantages of mechanical lidar systems versus 905 and 1550 technologies and the cost curve associated with each?

Your comments and feedback are always welcome. Let’s continue the discussion. Email me at jmakris@investorplace.com.

On the date of publication, Joanna Makris owned shares of Microvision. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Click here to track her top trades, where she sheds light on market psychology and momentum, while leveraging her deep knowledge of fundamental analysis to deliver event-driven trading strategies.

More From InvestorPlace

The post Dear Sumit Sharma, Our Readers Have Serious Questions About MicroVision appeared first on InvestorPlace.