Hesai Group (NASDAQ: HSAI) saw its stock surge 5.15% in Tuesday's trading session, driven by two significant developments that bolstered investor confidence in the lidar technology company's growth prospects.

The primary catalyst for the stock's upward movement was the announcement that Hesai has been named the exclusive lidar supplier for Li Auto's next-generation assisted driving platform. This agreement covers all of Li Auto's upcoming models, including the "L" Series, "i" Series, and "MEGA," signifying a major expansion of their long-term collaboration. The partnership aims to strengthen Li Auto's smart driving capabilities through Hesai's advanced lidar technology, potentially opening up a substantial revenue stream for Hesai as Li Auto continues to grow its electric vehicle production.

Adding to the positive sentiment, Hesai reported strong financial results for the third quarter of 2025. The company achieved a record-high net profit of RMB256 million (approximately $36 million), showcasing significant improvement from the previous year. Revenue reached $111.7 million, up from $76.9 million in 2024, while adjusted earnings per share came in at 28 cents, compared to a loss of 5 cents a year earlier. The company also reported shipping 441,398 lidar units in the quarter, reflecting growing adoption among automakers and an increase in production scale.

These developments underscore Hesai's strengthening position in the automotive lidar market and its improving financial performance, factors that likely contributed to the stock's notable rise on Tuesday.