Al Root

Shares of lidar maker Ouster soared after the company prepared itself for the robot revolution.

Monday, Outster announced the acquisition of StereoLabs, a camera maker that enables machine vision. Paired with Ouster's lidar, which is essentially laser-based radar, the combination creates "a leading sensing and perception for Physical AI."

Physical AI is artificial intelligence that interacts with the real world, instead of just virtual chatbots helping workers create software code or draft emails. Tesla's robo-taxis are an example of physical AI. So are the AI-trained humanoid robots it plans to make in 2026.

"If you really pay attention to the details of what [physical AI] machines are, they're an advanced AI computer, there are cameras, and lidar, as predominant sensing modalities," says Ouster CEO Angus Pacala. "We're really at the forefront of physical AI solutions across industrial, robotics, automotive, and smart infrastructure."

Ouster stock was up 9.3% at $21.22 in midday trading, while the S&P 500 and Dow Jones Industrial Average were up 0.7% and 0.1%, respectively.

One reason for the reaction is that investors have confidence in the company. Ouster announced the acquisition of Velodyne in late 2022 with Ouster shares below $12 apiece. That deal went well, with sales up about fourfold since then.

Investors hope for similar results with StereoLabs. Ouster is paying $35 million in cash and issuing 1.8 million shares. StereoLabs did $16 million in 2025 sales and is "Ebitda positive," according to Ouster.

Ebitda is short for earnings before interest, taxes, depreciation, and amortization.

Monday's gains left Ouster stock up 106% over the past 12 months.

Write to Al Root at allen.root@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

February 09, 2026 14:51 ET (19:51 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.