Why Luminar Technologies Stock Raced Higher on Thursday

Luminar Technologies (NASDAQ: LAZR), which designs next-generation light detection and ranging (lidar) products that help assisted-driving vehicle systems "see," saw its stock accelerate impressively on Thursday.

Its price rose by nearly 9% on news of a deal with a storied American industrial company. That performance was far better than that of the S&P 500 index, which ended the day 0.3% in the red.

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Caterpillar autonomy

That company, Luminar, is industrial equipment and vehicle maker Caterpillar. Luminar will work on developing lidar solutions for an autonomous industrial vehicle its partner is developing.

This technology will be integrated into Caterpillar's remote Cat Command functionalities. It will be used initially to assist in hauling operations, specifically for quarry and aggregate work. In terms of hardware, two of Luminar's Iris lidar sensors will be installed in Cat off-highway trucks to enhance the "senses" of the vehicles.

In its press release touting the deal, Luminar quoted its founder and CEO Austin Russell as saying that since it "has successfully executed for automotive series production, we're able to branch out to adjacent markets with a shared mission."

"Together, we look forward to saving lives and enhancing profitability for [Caterpillar] customers around the world with industry-leading capabilities," Russell added.

No details? No problem

One key element missing from Luminar's press release was the financial details of the Caterpillar arrangement. In a way, though, this doesn't make all that much difference. The key takeaway is that the company has scored a gig with a top manufacturer in its field. And if the arrangement works out for both parties, Caterpillar could be a customer for quite a long time to come.

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Eric Volkman 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.