A credible path exists to scale beyond “lidar units” into software-attached deployments in intersections, yards, and perimeters. Upside depends on proving repeatable attach and multi-year programs before sensor pricing commoditizes.

Ouster’s non-linear upside is turning “digital lidar shipments” into a software-attached operating system for real-world safety and flow (intersections, yards, perimeters), where trust, uptime, and deploy-at-scale integrations compound faster than sensor ASP erosion.

Physical AI needs reliable real-world sensing; Ouster’s firmware-defined lidar + deployable perception software can become a default endpoint for automation, safety, and verification.

Ouster can plausibly earn a “hardware + software” valuation by scaling deployments where lidar is mission-critical (traffic actuation, yard automation, perimeter security) and by proving repeatable software attach. The upside is less about a single auto program and more about becoming the standard sensing endpoint integrators spec into systems. As recurring software mix rises and gross margin stays structurally higher, the market can justify a durable growth multiple even as pure sensor peers struggle.

The main risk is strategic: Ouster must prove software attach and multi-year production deployments before lidar pricing compresses. Secondary risks are adoption timing (cities), competitive undercutting (including well-capitalized peers), and per-share dilution if profitability takes longer than expected.

$34.80