Why Luminar Stock Is Skyrocketing Today

Luminar (NASDAQ: LAZR) stock is posting huge gains in Monday's trading. The lidar company's share price was up 20.7% as of 1:30 p.m. ET amid the backdrop of a 0.9% jump for the S&P 500 index and gains of 1.4% for the Nasdaq Composite index.

Luminar stock is soaring today thanks to surging bullish momentum for the semiconductor industry. Its share price is also gaining ground because investors are betting that Nvidia could share news about its partnership with the company at the kickoff of the CES conference tonight.

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Nvidia helps power huge gains for Luminar stock

Nvidia stock is climbing today following Foxconn's recent fourth-quarter report. Nvidia is one of Foxconn's most high-profile customers, and the China-based tech manufacturing company had some good news for investors today. Thanks to AI-related demand, Foxconn reported record revenue in the fourth quarter. The company's sales performance and commentary point to a very strong demand backdrop for Nvidia, and the dynamic is powering bullish momentum for the broader semiconductor space -- and Luminar stock is benefiting from the momentum.

Luminar stock is also gaining ground in conjunction with excitement surrounding Nvidia CEO Jensen Huang's keynote presentation at the CES conference tonight. His speech is scheduled to begin at 9:30 p.m. ET, and investors are eagerly awaiting new product and outlook information from the world's most influential artificial intelligence (AI) company. Nvidia previously formed a partnership with Luminar to integrate the lidar-specialist's technologies into its autonomous vehicles platform, and some investors are betting that Huang could share major updates about his company's auto-tech initiatives tonight.

What's next for Luminar?

Luminar stock has been highly volatile lately. Even with explosive gains today, the company's share price is down roughly 84% over the last year. If Huang were to mention Luminar in his keynote or even discuss lidar in relation to Nvidia's plans, the smaller company's stock could soar. However, investors should move forward with the understanding that this is hardly guaranteed.

While Luminar has a partnership with Nvidia, news of the collaboration between the two companies has been relatively sparse over the last year. The lidar specialist's recent business performance has also been somewhat underwhelming. Revenue fell roughly 8.6% year over year to $15.5 million in the third quarter. Luminar's beaten-down valuation opens the door for potentially explosive upside if new positive catalysts emerge, but the business's recent performance trajectory makes the stock a risky bet.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.