What happened

Shares of MicroVision (MVIS 3.23%) gained 24.7% in March, according to data from S&P Global Market Intelligence. The stock shrugged off market-shaking volatility in the technology sector and posted big gains thanks to encouraging guidance from management and signs of momentum in the broader machine vision space. 

MVIS Chart

MVIS data by YCharts

MicroVision published its fourth-quarter results on March 11, reporting that it had generated $395,000 in licensing revenue and posted a net loss of $3.6 million ($0.02 per share) in the period. However, news that the company's long-range light-detection-and-ranging (lidar) technologies could be ready for market this year appears to have been the factor behind the huge jump.

MicroVision stock also appears to have gotten a substantial boost at the end of the month following news that Microsoft had signed a $22 billion contract to provide HoloLens 2 augmented-reality headset units to the U.S. Army. 

A car driving towards light.

Image source: Getty Images.

So what

MicroVision expects to demonstrate a working version of its long-range lidar technology this month, and management believes it could have a small number of units available for sale in the third or the fourth quarter. The company is reportedly a components supplier for Microsoft's HoloLens 2 hardware, and the tech giant's huge deal with the U.S. Army could be a major boon to the machine-vision technology company.

Strong performance for MicroVision stock last month came on the heels of a 109% increase for the company's share price in February. 

Now what

MicroVision stock has been hit with a significant sell-off early in April's trading. The company's share price sank roughly 16.7% in the month's first trading day. 

MVIS Chart

MVIS data by YCharts

While machine vision is likely to be a hot growth industry through the next decade and beyond, investors should keep in mind that there are a variety of competitors in the lidar niche and broader technology category, and MicroVision's outlook is highly speculative. It's possible that the company will score big wins with long-range lidar and other solutions, but the company is still very young and has yet to generate substantial revenue -- let alone profits.

MicroVision has a market capitalization of roughly $2.45 billion and is valued at a whopping 603 times this year's expected sales.