Ouster Inc. (OUST) Surges 16.38% on Strong Q2 Revenue, Strategic Partnerships Drive Optimism

Ouster Inc. (OUST) surged 16.38% on Tuesday, marking its second consecutive day of gains, with the stock climbing 29.79% over the past two sessions. The share price reached its highest level since October 2025, hitting an intraday high of 18.35% above its previous close.

Analyst sentiment has shifted toward cautious optimism, with a "Moderate Buy" average rating reflecting confidence in Ouster’s lidar technology despite ongoing financial challenges. A revised price target of $30 from Cantor Fitzgerald underscores expectations of growth, though profitability remains elusive amid high operational costs and a beta of 2.73, signaling elevated volatility.

Institutional activity has been mixed, with DnB Asset Management and Psagot Value Holdings increasing their stakes in September, while others like 180 Wealth Advisors sold shares. These diverging actions highlight uncertainty about Ouster’s valuation and long-term execution, particularly as the company navigates capital-intensive expansion and competitive pressures.

Strategic partnerships, such as the collaboration with Constellis to integrate lidar into AI-driven security platforms, have broadened Ouster’s market reach. The company also reported Q2 2025 revenue of $35.05 million, surpassing forecasts, though a wider-than-expected EPS loss of $0.38 underscores its struggle to balance growth with profitability.

Legal efforts to enforce patents against Hesai have drawn investor attention, aiming to protect intellectual property in a crowded sector. However, prolonged litigation risks diverting resources from core operations. With over 113,000 sensors shipped to date, Ouster’s market penetration is growing, but scaling remains critical against rivals like Velodyne.

The stock’s recent rally reflects speculative optimism about lidar’s role in AI and autonomous technologies. Yet, reliance on capital raises and macroeconomic headwinds, including interest rates, pose risks for a company with negative cash flow. Analysts’ wide price target range—from $30 to $50—highlights ongoing debate over Ouster’s fair valuation.