Why Innoviz Technologies shares are soaring today

What happened

Innoviz Technologies (NASDAQ: INVZ) the stock rose sharply on Tuesday. As of 12:41 p.m. ET, shares of the lidar technology specialist were up 22.1%.

The news that got the bulls’ engines revving was that volkswagen (OTC: VWAGY) had selected Innoviz to supply lidar sensors and software for its autonomous vehicle subsidiary.

So what

In early May, Innoviz Technologies announced that it had signed a new contract with a major automaker, but has not yet named the customer. Now investors know the mystery shopper was Volkswagen. CARIAD SE, a subsidiary technology company of Volkswagen, selected Innoviz for its next-generation InnovizTwo lidar sensors and perception software.

“We are excited to work with the CARIAD team and be a provider of LiDAR sensors and perception software to support safe mobility for vehicles launched from mid-decade onwards,” said Omer Keilaf, CEO and co-founder of Innoviz.

In its press release on Tuesday, Innoviz reiterated that its backlog grew to $6.6 billion from the $2.6 billion it previously reported in May.

Now what

It’s no surprise the market is celebrating VW news, given that Innoviz’s newest client is one of the biggest players in the global automotive industry. Additionally, investors might also speculate that this deal could be a harbinger of future partnerships with other major automakers.

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Scott Levine has no position in the stocks mentioned. The Motley Fool fills positions and recommends Volkswagen AG. The Motley Fool has a disclosure policy.

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