#60 - New Position - Ouster Inc. $OUST

In partnership with

Market Recap

• Joby Aviation $JOBY ( ▼ 1.02% )  secured a $250 million investment from Toyota Motor Corporation $TM ( ▼ 1.41% ) , marking the first tranche of a previously announced $500 million funding agreement. This capital infusion aims to support the certification and commercial production of Joby's eVTOL aircraft, bringing the two companies closer to a strategic manufacturing alliance. Following the announcement, Joby's stock surged by over 25%

• $ELF ( ▼ 1.87% )  e.l.f. Beauty has announced its acquisition of Hailey Bieber's skincare brand, Rhode, in a deal valued at up to $1 billion. The transaction comprises $600 million in cash, $200 million in e.l.f. stock, and an additional $200 million contingent on performance over the next three years. Hailey Bieber will continue to play a pivotal role in the brand's direction, serving as Chief Creative Officer, Head of Innovation, and Strategic Advisor. e.l.f. shares are trading up almost 80% over the past month and skyrocketed +30% the past week.

• Circle Internet Financial $CRCL ( ▲ 33.82% ) , the issuer of the USDC stablecoin, has announced plans to go public on the New York Stock Exchange. They aim to raise up to $624 million through the sale of 24 million shares priced between $24 and $26 each. This move marks one of the largest crypto-related IPOs since Coinbase's debut in 2021. Circle acts as a bridge between traditional finance (TradFi) and decentralized finance (DeFi). It’s a key player in pushing regulatory-compliant, dollar-backed digital currency adoption.

Find out why 1M+ professionals read Superhuman AI daily.

In 2 years you will be working for AI

Or an AI will be working for you

Here's how you can future-proof yourself:

1. Join the Superhuman AI newsletter – read by 1M+ people at top companies

2. Master AI tools, tutorials, and news in just 3 minutes a day

3. Become 10X more productive using AI

Join 1,000,000+ pros at companies like Google, Meta, and Amazon that are using AI to get ahead.

Sign up and start learning AI

Freedom Fund Portfolio

This week, U.S. stock markets experienced gains, driven by a combination of legal developments and strong corporate earnings. A federal court ruling that blocked several of former President Donald Trump's tariffs boosted investor confidence, particularly benefiting technology stocks. Nvidia's impressive earnings report, showcasing a 69% revenue increase, further propelled the market upward. Major indexes like the Nasdaq and S&P 500 saw significant weekly increases, with the Nasdaq leading at a 2.3% gain in the short trading week. No real major changes to the public account this week besides a new position (see recap below).

• Friday Freedom Fund Purchase:

  • 17 shares of $OUST ( ▲ 6.05% )  

• Portfolio News:

  • $PLTR ( ▼ 0.21% ) - Fannie Mae has partnered with Palantir to launch an AI-powered Crime Detection Unit aimed at enhancing the detection and prevention of mortgage fraud, potentially saving the U.S. housing market millions in fraud losses. This initiative leverages artificial intelligence to monitor and analyze vast datasets for irregular patterns. With over $4.3 trillion in assets and a market capitalization of $65.9 billion, Fannie Mae's collaboration with Palantir marks a significant stride in its efforts to combat mortgage fraud

Freedom Fund Background: I created the Freedom Fund as a public brokerage account back in October of 2022 to share that anyone with a social security # and a bank account can begin their investing journey by investing a couple hundred dollars a week. Every week and month I post on X (@GrahamInvesting) public updates about the purchases, exits, dividends, and growth of the fund if you want to follow in real time. The biggest obstacle people have to investing is just getting started so I decided to start a new account at $0 to start from nothing with you.

New Stock Position - Ouster Inc.

This past winter I really got into watching the National Geographic films Lost Cities by Albert Lin where I watched scientists using LiDAR (Light Detection and Ranging) imaging to discover, uncover, and re-create unexcavated worlds from past generations hidden beneath the earth. Initially I thought this technology would really be something in the future to discover future lost cities. But then I started doing some research and realized that LiDAR will be a key component in our future development around AI, robotics, and drone technology. I started searching for LiDAR companies and the one that stuck out the most to me was Ouster Inc. ($OUST ( ▲ 6.05% ) ).

Founded in 2015 and led by CEO Angus Pacala, Ouster is a San Francisco-based company specializing in high-resolution digital lidar sensors used in autonomous vehicles, robotics, drones, and smart infrastructure. Its products, like the OS0, OS1, OS2, and OSDome, offer 3D spatial awareness with advanced range and resolution, powered by its proprietary L3 chip. In 2023, Ouster merged with Velodyne Lidar to expand its market reach, and its sensors are now used globally across over 50 countries. Ouster offers software that complement its lidar hardware, including Ouster Studio for real-time 3D data visualization and mapping, and Gemini, an AI-powered platform for object detection and tracking in transportation and security settings. And BlueCity, which provides smart city analytics like traffic flow and pedestrian monitoring to improve urban planning and safety.

2024 Financials

• Total Revenue: $111 million, a 33% increase from $83 million in 2023.

• GAAP Gross Margin: 36%, up from 10% in 2023.

• Net Loss: $97 million, significantly reduced from $374 million in 2023.

• Sensor Shipments: Over 17,300 units delivered.

• Software Deployments: Expanded Ouster Gemini and BlueCity deployments to more than 700 sites.

• Cash Position: Ended the year with $175 million in cash, cash equivalents, restricted cash, and short-term investments. Fully repaid all outstanding balances under the revolving credit line using cash on hand.

Q1 2025 Financial Highlight

• Revenue: $33 million, a 26% year-over-year increase.

• GAAP Gross Margin: 41%, up from 29% in Q1 2024.

• Net Loss: $22 million, reduced from $24 million in Q1 2024.

• Adjusted EBITDA Loss: $8 million, improving from a $12 million loss in Q1 2024.

• Sensor Shipments: Approximately 4,700 units shipped.

• Cash Position: $171 million in cash and short-term investments, with no debt.

You probably wonder why I am buying a company that still has net losses and the reality is that Ouster’s losses reflect investments in long-term growth, not financial instability. With strong gross margins and no debt, it is positioned to reach profitability as scale and software revenues increase. I decided to start building a position in this company due to the fact that they aren’t profitable yet (similar to early days like Palantir or Evolv) but have no debt and a good cash position. While hardware sales bring immediate income, Ouster’s vision includes building recurring, high-margin software revenue streams.

The potential? Ouster provides diversified applications spanning the autonomous vehicles, industrial automation, robotics, and the smart city industry. Ouster is strategically positioned in a market expected to grow rapidly. LiDAR companies in general are well-positioned in sectors with structural growth that is forming with AI, robotics, and industrial automation. While there are an abundance of LiDAR companies competing in the automotive industry, Ouster distinguishes itself through its technology in a more diversified approach focusing on more than the automotive industry (like most the competition).

If Ouster continues to scale its high-margin software offerings, leverages and grows its strategic partnerships with companies like NVIDIA, and captures share across diversified LiDAR markets, it could emerge as a standout mid-cap tech player riding the wave of AI making it a compelling 2–3 year growth investment. Ousters share price has been trading flat in the $8-$12 range for the past couple of years. As the company achieves profitability, gains more marketspace with their partnerships, and as cities adopting more Smart City technology I think Ouster could continue to grow at a solid rate. Since they became public in 2020 the company has averaged a CAGR of 53%. If the company maintains a CAGR even at a 30-40% rate the next couple of years. And they improve margins along the way I project share price could be between $19-$75 by 2027. Future earnings will need to be examined to ensure projections stay the same. LiDAR began as a government and scientific tool in the 1960s and evolved into a commercial powerhouse in the 2000s. But I believe the next wave of growth is likely to just be beginning with rapid expansion today driven by autonomy, robotics, and 3D spatial intelligence.

The purpose of this newsletter is to encourage you and our other 91 Gazette subscribers to start and stay consistent with your personal, professional, and financial journey.

Thanks for investing your time reading this.

-Graham (@GrahamInvesting)

Disclaimer: Graham’s Gazette provides information and resources related to investing, financial topics, and personal growth for educational and entertainment purposes only. The content presented is not intended to be construed as financial advice. Readers are encouraged to conduct their own research and consult with qualified professionals before making any financial decisions. Graham’s Gazette and its creators do not assume any responsibility for the accuracy or completeness of the information provided nor do they guarantee any specific results from such use of information.