Aurora Innovation's (NASDAQ:AUR) share price surged more than 50% following news it had partnered with NVIDIA (NASDAQ:NVDA). While there are hurdles to overcome, the share price can easily rise another 100% or more this year because the stock is deeply undervalued. The deal with NVIDIA is part of NVIDIA’s push into a broader range of end markets centered on its AI technology. NVIDIA is out to disrupt the autonomous driving industry, and Aurora is a critical piece of the puzzle. NVIDIA provides the hardware and software to operate Aurora’s Driver platform, while Continental (OTC:CTTAF) will put the components into a marketable package. The target market is big trucks, which will undoubtedly include other vehicle types over time. 

Unlike other technological advances, this one is slated to enter production this year. The plan is for an initial market launch in May, with mass production beginning in 2027. The deal is to produce and deploy products at scale, capturing a large portion of the global AV market. The takeaway for Aurora investors is that this deal validates the business while rapidly accelerating the revenue and profitability outlook. As it is, the ten analysts tracked by MarketBeat are forecasting quadruple-digit hypergrowth in 2025, triple-digit growth in the next four to five years, and solid, high-double-digit growth for several years beyond that. Regarding the valuation, the company’s P/E in this scenario is roughly 12x in 2030, a deep value for a rapidly growing tech company. 

The analysts’ trends favor higher stock prices for Aurora Innovation. The trends in 2024 and the first weeks of 2025 include increasing coverage and price targets, with the consensus rating pegged at Hold and the consensus up more than 40% in 12 months and nearly 25% from December 2024 to January 2025. The consensus lags the price action in January. Still, the freshest targets, including one issued following the NVIDIA announcement, put this stock at $10 to align with a critical resistance target, the price at which the stock traded when the SPAC merger closed in 2021. 

Insider and institutional ownership for this company is robust and aiding the updraft in share prices. Insiders have sold over the last year, with nearly 100% of sales by investor Reed Hoffman. Hoffman is notable for his role in co-founding LinkedIn and as an early investor. Even so, insiders own about 15% of the stock, including a still-sizeable portion by Hoffman. On the other hand, institutions have been buying this stock on balance quarterly for six consecutive quarters and now hold about 45% of the shares. Institutional buying is broad-based and includes leading firms like JPMorgan Chase, Franklin Resources, and State Street, alongside public and private investment capital and boutique money managers. 

Aurora diluted its share value by 15% in F2024, and there is a risk of additional dilution, but it is mitigated for now. The company raised nearly $0.5 billion in funds, bringing the cash, equivalents, and long-term investments to over $1.35 billion. That leaves the company in a net cash position relative to total liability, with cash and investments sufficient to cover nearly 10 quarters of operations at the Q3 burn rate; the company will be profitable before then. Liability is about 0.18x cash and investment and 0.1x assets.

The market for Aurora’s stock has been simmering for months, with volume rising and pushing the price action higher. The stock price shows a clear bottom at the $1.50 level, breaking above a trigger point in late 2024. The trigger point is the baseline/neckline for the reversal pattern, and it has been confirmed as support. The 2025 price surge confirms support at this level and points to higher prices over time. With this in play, the market will likely reach the $10 level to retest the critical resistance target again soon. Assuming the market can move above it, a move up to the mid-to-high teens is likely. At that price point, this stock will trade at a valuation better aligned with the growth outlook.