Nvidia Helps Light Up Aurora ... But Is It a Buy?
If you didn't know about Aurora Innovation before Monday's CES name drop, don't worry, I'll bring you up to speed.
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Aurora Innovation AUR sold off to the tune of roughly 4.7% on Monday. Overnight, the shares have traded as high as $11.16 and as low as $7.19 after closing at $6.50 at the Nasdaq MarketSite on Monday afternoon. The "why" is obvious. The company said on the same day and place that Nvidia NVDA made a huge splash -- at CES 2025 -- that it was now involved in a long-term strategic partnership with Nvidia and Continental Aktiengesellschaft CTTAF to deploy driverless trucks at scale.
As I mentioned in Tuesday morning's Market Recon column, this collaboration is intended to leverage Nvidia's DRIVE Thor system-on-a-chip and DriveOS operating system in their integration into Aurora Driver, which is an SAE Level 4 autonomous driving system. The SAE automation levels run from 0-5 with zero being what most of us are still driving and four being very close to full automation.
Aurora is in the final stages of validation for the Aurora Driver to initiate operation on public roads. Aurora Driver is equipped with a computer, sensors, lidar, radar, and cameras, that should enable vehicles to operate at highway speeds. Artificial intelligence will enable Aurora Driver to quickly adapt to changing environments and domains while being validated through the company's Safety Case.
The CEO...
Aurora CEO and co-founder, Chris Urmson, said: “Delivering one driverless truck will be monumental. Deploying thousands will change the way we live. Nvidia is the market leader in accelerated computing, and they’ll strengthen our ecosystem of partners and our ability to deliver safe and reliable driverless trucks to our customers at scale."
Who the Heck is Aurora Innovation?
Aurora isn't really a small-cap. It's not even a mid-cap. After this, it's more like a very small, large-cap with a highly volatile market cap. It is, at least for the moment, a stock that trades under $10, but by the time this piece hits publication, who knows? The company is headquartered in Pittsburgh.
Its Aurora Driver platform is adaptable to a number of vehicle types, including passenger vehicles and Class 8 trucks.
Among the companies projects are Aurora Connect, which would be a driverless ride hailing service and Aurora Horizon, which would be a subscription driverless trucking service. The company has been testing self-driving vehicles equipped with its platforms in the Pittsburgh area, in Texas, and in the Bay Area of California.
Earnings & Fundamentals
Aurora reported its fiscal third quarter on Oct. 30, revealing an unadjusted loss per share of $0.13 on exactly no revenue. Before that, the company had not reported revenue since the December 2022 quarter. It is expected to report the fourth quarter in mid-February. There's not a lot of coverage, maybe one analyst projecting earnings and a total of three projecting revenue. For the fourth quarter, what I'll loosely refer to as "The Street" is looking for an unadjusted loss per share of $0.11 on a whopping $200,000 worth of revenue. For the full year 2025, this same group of "sort of" analysts have predicted an earnings loss per share of $0.47 on revenue of less than $7.5 million. Of course, that was before Aurora buddied up with Jensen Huang and the gang at Nvidia.
Obviously operating cash flows have been deeply negative. Aurura has burned roughly $632 million in cash over the past 12 months. Looking into the balance sheet, as of the September quarter, Aurora had $1.248 billion in cash on hand, which makes up nearly all of its current assets, which came to $1.275 billion. Current liabilities were just $93 million. That does make for one heck of a nice current ratio. Just can't burn cash at the rate it has forever. Thank goodness for Nvidia. The company has no debt on the books whatsoever, which is a huge positive.
The Chart
Readers will see that the stock is breaking out of a more than one year upward sloping regression model this morning. Of course, this is a highly speculative play.
Not only does Aurora not make money, it doesn't really drive revenue. My thought is to pick up a few shares and forget about them for a while. I won't hold them to my 8% rule as I rarely do with very low-priced stocks. I just won't be buying any of these shares today. I will wait for either the top trendline of the regression model or the 50-day simple moving average to be tested from above, and if it looks like the company is on the right path ... then I would plunk down a few bucks. I said a few. This will not be a major investment.
At the time of publication, Guilfoyle was long NVDA equity.
