There are really not a lot of secrets in stocks anymore. At one time, a company like Foresight Autonomous (NASDAQ:FRSX) may have traded under the radar. But that’s not the case in 2021; the company is well-known by the trading community and FRSX stock has delivered the gains to prove it.
Since the beginning of the year, FRSX stock is up 181% because investors are buying the shares on a rumor. In this case, Foresight Automation announced that it has a pilot project in place with a major global automaker. Since revenue was one of the missing pieces to the company’s puzzle, the trading community has seized on the announcement, even though the automaker involved in the pilot has not been named.
Now the real work begins. The bulls and the bears are playing tug-of-war with the stock. As a result, it might be best for investors to sit on the sidelines until a winner emerges. But you’ll want to keep your eye on FRSX stock because Foresight is worth watching.
An Alternative to Lidar
The story of Foresight Autonomous begins and ends with the autonomous-vehicle market. On Foresight’s website, the company reports that “The QuadSight system is targeting the ADAS, semi-autonomous and full autonomous vehicle applications.”
For those not familiar with what’s occurring in the autonomous vehicle space, let me offer this brief and simplistic analysis: Many car companies are racing to electrify their vehicles. But they have realized that demand for autonomous vehicles may exceed even the demand for electric vehicles.
Currently, one of the tools that is used to give vehicles autonomy is lidar. That is why the shares of companies like Luminar Technologies (NASDAQ:LAZR) and Velodyne Lidar (NASDAQ:VLDR) have been surging.
Foresight Autonomous takes a different approach, using cameras instead of lidar. The company’s QuadSight system offers the ability “to detect any obstacle on the road and the ability to safely operate in even extreme weather and lighting conditions,” according to Foresight.
It’s the classic case of, potentially, a better mousetrap. And it seems the company’s camera-based system may help the industry navigate a current obstacle to an autonomous future. That is, our nation’s infrastructure (roads, bridges, etc.) is not built to handle autonomous vehicles.
A Bet on a Future That Remains Years Away
InvestorPlace columnist Louis Navellier made the point that autonomous vehicles are inevitable. However, inevitable and imminent are two very different words. And that’s where investing in FRSX stock gets tricky.
Tesla (NASDAQ:TSLA) CEO Elon Musk had pledged to have 1 million autonomous “robotaxis” cruising the country by the end of last year. The company has moved the goalposts a bit, but it is still hoping to accomplish that goal sometime in 2021.
I don’t mean that as a criticism. It’s simply evidence that the hope and the hype don’t match up when it comes to autonomous driving.
The Easy Gains by FRSX Stock Look to Be Long Gone
Patience is in short supply when there is money to be made. Foresight Autonomous has drawn the attention of the day trading community, and it is trying to hold the stock above the $10 mark.
I think that the easy gains of FRSX stock are long gone. I agree with another InvestorPlace columnist, Larry Ramer, about FRSX stock: Initiating a bullish position at the shares’ current level is very risky. Investors can wait until the technology proves itself before doing so.
On the date of publication Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Chris Markoch is a freelance financial copywriter who has been covering the market for seven years. He has been writing for Investor Place since 2019.