It goes without saying that EV stocks have been on fire in recent weeks. That’s clear from the performance of the iShares Self-Driving EV and Tech ETF IDRV lately. But it’s really on display in how the three most popular EV stocks among investors, Lucid LCID, Rivian RIVN, and Tesla TSLA have traded in recent weeks. All three have rocketed in price since October.
Why? Besides overall renewed excitement for EV stocks, it is thanks to factors as varied as hitting a key milestone (in the case of Lucid), going public (in the case of Rivian), and delivering strong Q4 results (in the case of Tesla).
As the LCID stock rally carries on, RIVN stock pulls back after its stunning post-IPO rally, and TSLA stock makes a go at an encore after sharply selling off, which of any of the three is the best buy? Let’s dive in and find out.
(Read more from Wall Street Memes: NVIDIA or AMD Stock: Which Is A Better Buy Now)
In the case of the LCID stock rally, it’s been a bit of a comeback story. Earlier this year, shares in this company (formerly a SPAC known as Churchill Capital IV) soared and sank, when traders bought on the rumor of it merging with Lucid Motors (then privately-held), and sold on the news.
But after months of zig-zagging between $20 and $30 per share, it began to take off again in late October. First, thanks to news of the electric automaker making the first customer deliveries of its Lucid Air luxury EV. Then, the rally extended, likely due to the renewed bullishness around Tesla, plus developments such as Congress passing the $1 trillion infrastructure bill.
On top of all this, the market’s positive reaction to its latest quarterly earnings report has extended this turbo-charged rally as well. So, after more than doubling in price in less than a month, is a pullback in order? Unless it releases further developments in the weeks ahead, its latest rally could slow down, or reverse -- depending on whether the overall buzz around EV stocks takes a breather from here.
One can’t deny the role the overall EV stock euphoria has played in helping RIVN stock soar “to the moon” since its debut in the public markets on November 10. Yet, it may not have been just meme hype that compelled investors to send shares in this EV maker (which has yet to sell a single vehicle) from its IPO price of $75 per share, to as much as $179 per share, in a matter of days.
But keep in mind Rivian’s high production capacity; the fact that the company has sold out its R1 lineup of trucks and SUV through 2023; and its ambitions to produce 1 million vehicles per year by 2030. Valuing the company at more than $100 billion may not be as absurd as it seems.
Then again, the stock sharply sold off in the past few days, trading now for around $108 per share. This may signal that the hype’s fading a bit, and traders are quickly taking profit. Shares may be at risk of falling back further and staying there, if this latest wave of euphoria for anything EV-related calms down further.
A well-received quarterly earnings report, atop record delivery numbers, and talk of a fleet deal with Hertz HTZ, are what enabled TSLA stock to hit a four-figure share price, as well as become a trillion-dollar plus company by market capitalization.
But Tesla stock’s recent moves have been as much of a rollercoaster ride as a joyride. The TSLA rally temporarily screeched to a halt on November 8, as news broke of CEO Elon Musk selling a multi-billion dollar block of his personal position in the electric automaker.
Not even this substantial amount of insider selling, however, has been enough to sour bullishness among investors on both Main Street and Wall Street. An analyst upgrade, plus a tweet from Musk saying the company’s Model S Plaid will “probably” debut in China early next year, have convinced the market that the party’s not over just yet. Even so, keep in mind that sentiment could easily turn on a dime once again.
If you were to buy one of the three EV stocks below and hold it for 12 months, which would be your top pick?
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(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting Wall Street Memes)