Hesai Group (NASDAQ: HSAI), a leading provider of lidar technology, saw its stock soar 5.11% in the pre-market session on Wednesday. This surge follows a remarkable 17.77% jump on Tuesday, as investors continue to react positively to recent developments and strategic moves by the company.

The primary catalyst for Hesai's stock rally appears to be its strengthening partnership with Baidu. It was recently reported that Baidu has deployed 1,000 unmanned vehicles in Dubai, all equipped with Hesai's advanced lidar technology. This deployment stems from an exclusive agreement signed between Hesai and Baidu Apollo in July 2024, aimed at facilitating level 4 autonomous driving in Dubai's complex urban environment. Hesai CEO David Li emphasized the crucial role of their lidar technology in achieving safe and efficient autonomous vehicle operations in intricate urban settings.

Additionally, Hesai's stock is benefiting from the company's strategic expansion plans. The company recently announced it would break ground on its first overseas factory, a move aimed at mitigating risks associated with growing trade tensions between the United States and China. Hesai's Chief Finance Officer, Andrew Fan, stated that this approach has been well-received by clients looking to diversify risks. This expansion strategy appears to be boosting investor confidence in Hesai's long-term growth prospects and its ability to navigate geopolitical challenges.