Rivian stock price continued its strong bull run, reaching a high of $20.30, up by 113% from its lowest level this year. It has jumped to the highest level since January 2024, bringing its market capitalization to over $24 billion. This article explores why the RIVN stock price is soaring and what to expect in the near term.
Rivian stock price has soared after its investor day
The RIVN stock price has done well in a difficult year in which Donald Trump ended subsidies to electric vehicles and the EV tax credit that brought it millions of dollars a year.
There are a few reasons why Rivian shares have gone parabolic despite these major headwinds. First, the company has received some bullish ratings from analysts in the past few days. For example, George Gianarikas, a top analyst from Baird, boosted his rating from neutral to outperform and his target from $15 to $24.
George Gianarikas, an analyst from Canaccord Genuity, reiterated his bullish estimate. Evercore ISI has an outperform rating on the company.
Still, the average estimate by analysts is bearish, with the target being $15.34, down by 24% from the current level.
Rivian stock price has also done well after holding its investor day earlier this month. The company shared that it had developed its autonomous chip and AI chip. By building the chip in-house, the company hopes that it will have the best vehicles in the country.
Therefore, there are hope that the company is becoming an AI and autonomous firm that will challenge the likes of Tesla
Meanwhile, investors are cheering the upcoming launch of Rivian R2, which will be a cheaper vehicle starting at $45,000. The deliveries are expected to start in the second half of next year. It will be much cheaper than the current R1 lineup, which starts at $76,990, and the R1T that starts at $72,990.
Rivian reported strong results
The RIVN stock price has also done well after the company published strong financial results. Its revenue rose by 78% in the last quarter as customers rushed to buy ahead of the tax credit expiry.
Its revenue jumped by 78% to $1.55 billion, a sign that the company is seeing strong demand. Its automotive revenue rose by 47% to $1.14 billion, while the software and services revenue rose by 324% to $416 million.
The company had a gross profit of $4 million, even as the automotive segment lost $249 million.
Meanwhile, analysts believe that the company’s revenue in the current quarter will be $1.27 billion, down by 26.7% from the same period last year. This will bring its annual revenue to $5.37 billion, up by 8% from the same period last year.
Rivian’s revenue is expected to jump by 27% to $6.85 billion in the following year despite the loss of the EV credit.
However, the risk is that the company will continue making huge losses, which may push it to raise capital. Its outstanding shares have jumped from 913 million in 2022 to 1.22 billion today.
RIVN stock price technical analysis
RIVN stock chart | Source: TradingView
The daily chart shows that the RIVN stock price has soared from a low of $8.26 in April last year to the current $20.30. It has now moved above the important resistance level at $18.80, the highest point in June 2024.
Rivian stock has moved above the 50-day and 100-day moving averages and the Supertrend indicators. Therefore, there are signs that the company has the momentum that may push it to the next key resistance level at $2522.
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