What happened

Shares of lidar sensor maker Velodyne Lidar (NASDAQ:VLDR) were trading 10% lower Thursday as of 11:45 a.m. EST. But that was after the stock shot up by almost 50% earlier this week. The stock has now given back about half of those gains. 

VLDR Chart

VLDR data by YCharts

So what

The volatility this week was driven in part by news that another lidar sensor maker is preparing to go public, and a rumor about Apple's (NASDAQ:AAPL) plans to bring an autonomous electric vehicle (EV) to market. 

velodyne lidar sensor on vehicle

Velodyne lidar sensor on a vehicle. Image source: Velodyne Lidar.

Now what

If it's true that Apple will come out with its own self-driving EV by 2024, as Reuters reported earlier this week, that certainly could be meaningful for lidar sensor makers. The share prices of both lidar sensor companies and EV battery makers soared on the potential. Of course, an Apple vehicle isn't definite, and no one knows what sensor technology it might use for its self-driving vehicles. 

News that fellow sensor maker Ouster plans to go public through a merger with special purpose acquisition company (SPAC) Colonnade Acquisition (NYSE:CLA) also drew investor interest to the sector this week. 

Velodyne's tech is used in a range of applications beyond the automotive realm -- among them, smart city applications, robotics, industrial, and mapping.

The stock's jump earlier this week, though, wasn't based on any specific business development. Thursday's share price decline is simply a reflection of that, most likely. The stock is still up by 45% over the last month, too. There is much promise in the future of the business, but investors should stay focused on any updates in that area. That investors are tempering their recent enthusiasm about Velodyne just seems to make sense, but it doesn't reflect anything about the underlying company. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.