Ouster, Inc. (OUST): A Bull Case Theory 

We came across a bullish thesis on Ouster, Inc. on Daniel Romero’s Substack. In this article, we will summarize the bulls’ thesis on OUST. Ouster, Inc.’s share was trading at $28.97 as of September 15th.

Automation is poised to transform industries on a global scale, and Ouster stands at the forefront of this shift as a Physical AI company. The firm specializes in digital lidar sensors and perception software, serving automotive, industrial, robotics, and smart infrastructure markets. Unlike traditional spinning lidar, Ouster’s REV7 digital lidar integrates the entire system onto a chip, creating a smaller, more durable, scalable, and cost-effective solution.

This technology is critical for autonomous applications, from drones and robotaxis to industrial machinery, and positions Ouster as a next-generation automation enabler. Ouster has secured high-profile clients across defense, agriculture, automotive, and robotics, including Anduril, Shield AI, John Deere, Motional, Volvo Autonomous Solutions, May Mobility, Liebherr Group, Komatsu, and Serve Robotics.

Its lidar systems are already deployed in operational prototypes, military drones, autonomous trucks, and delivery robots, demonstrating real-world traction and laying the foundation for a potentially massive scaling opportunity. Beyond hardware, Ouster is building software solutions like BlueCity for traffic management and Gemini for people and object detection, providing actionable AI insights that complement its sensors.

Financially, the company reported $35 million in quarterly revenue, up 30% year-over-year, with GAAP and non-GAAP gross margins of 45% and 52%, respectively, an improving net loss, adjusted EBITDA approaching profitability, $229 million in cash, and zero debt, underscoring strong operational health.

While still early in its growth phase, Ouster’s diversified client base, innovative technology, and recurring revenue potential position it as a leading Physical AI player. At a $1.7 billion market cap and 11x forward sales, the company’s valuation may seem elevated today, but its long-term prospects across defense, robotics, automotive, and industrial automation suggest substantial upside for investors who adopt a patient, strategic view.

Previously we covered a bullish thesis on Amphenol Corporation (APH) by TMTMoats in March 2025, which highlighted the company’s diversified exposure across aerospace, mobile devices, defense, and data centers, strategic acquisitions, and AI and EV-driven growth. The stock has appreciated approximately 91.15% since our coverage. The thesis still stands as Amphenol continues to benefit from multiple catalysts. Daniel Romero shares a similar bullish perspective but emphasizes Ouster’s leadership in digital lidar and Physical AI, targeting automation across defense, robotics, automotive, and industrial applications.

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Disclosure: None.