2021 has started out well for those who invest in the stocks in the Nasdaq Composite (NASDAQINDEX:^IXIC). The benchmark has kept rising even after an amazing 2020, and on Wednesday at noon EST, the Nasdaq was up another 1.75%. That was enough to set another all-time record high for the index.
One of the factors helping stoke enthusiasm about the stock market has been the spate of new companies coming public. Increasingly, privately held businesses are choosing to bring their shares to the investing community through special purpose acquisition companies, or SPACs. In anticipation of finding candidate companies to bring public, SPAC shares often jump once the SPAC identifies a solid target.
That helped shares of Opendoor Technologies (NASDAQ:OPEN) and Luminar Technologies (NASDAQ:LAZR) gain ground quickly, with both stocks more than doubling since last September. Yet even now, these two powerhouses are still on the move higher. Let's take a look at what's helping Opendoor and Luminar gain ground and what's ahead for both of the former SPACs.
Opening the door to big gains
Shares of Opendoor Technologies were up 10% at midday on Wednesday. The innovative real estate technology company is changing the way the industry functions, and many investors are excited about the company's potential.
Opendoor offers an alternative to the painful home-buying process that hundreds of millions of Americans have gone through over the years. Rather than forcing sellers to fix up their homes, list them with a real estate agent, and go through a months-long process of finding prospective buyers who can successfully navigate purchase contingencies and get financing, Opendoor makes quick offers on homes in several of the biggest real estate markets in the nation.
Opendoor isn't the only player in what's become known as the iBuyer industry. Older companies like Zillow (NASDAQ:Z) and Redfin (NASDAQ:RDFN) have staked their own claims. However, Opendoor maintains that it has advantages even over its competitors. Moreover, the multi-trillion-dollar real estate industry is more than large enough to give multiple companies a chance at strong growth.
Shooting to win
Meanwhile, Luminar Technologies is up almost 7% on Wednesday. The laser company has become an important player in the self-driving automobile industry, and its innovations could play a big role in helping make autonomous driving a reality.
Luminar's lidar technology uses pulsed laser beams to help autonomous driving systems measure distances between vehicles, obstacles, traffic signals, and other things that are important to detect. The company got a boost when news surfaced that it would work with a subsidiary of Intel (NASDAQ:INTC) toward creating a solution for self-driving vehicles.
The big question is whether Luminar can stand up to rising competition. Velodyne Lidar (NASDAQ:VLDR) has a considerable lead in lidar-based systems, while other small companies are also looking to take advantage of the healthy appetite among investors for self-driving vehicle stocks by coming public themselves.
In this fast-moving industry, Luminar can't afford to coast on its past success. Only by coming out with state-of-the-art technology and systems will the stock be able to keep advancing.