Editor’s note: This article was edited on Aug. 10 to correct the name of the firm analyst Adam Jonas represents.
For investors in Lucid Motors (NASDAQ:LCID), today is a very good day. Shares of LCID stock are currently up approximately 4% at the time of writing. Today’s move comes on a rather divergent day, with risk-on sentiment showing up among specific groups of stocks.
For early-stage electric vehicle (EV) company Lucid Motors, these sorts of big up days have been harder to come by of late. This is a stock that has trended downward since the beginning of the year. In fact, LCID stock has lost more than 60% of its value since its 52-week high as sentiment has ebbed and flowed.
Today, sentiment is certainly flowing in the right direction. Let’s take a look at what the key drivers of today’s moves are for Lucid Motors.
Why LCID Stock Is Soaring Today
Among the key reasons for Lucid’s impressive move today are three catalysts.
First, some significant buzz surrounding a massive upgrade for rival Fisker (NYSE:FSR) has taken speculative EV stocks higher today. Morgan Stanley analyst Adam Jonas set an “overweight” rating for the upstart EV maker, with a price target of $40. For a stock that’s been trading around $15 per share in recent days, this is a big upgrade. Additionally, Jonas indicated a bull case of $90 per share is a possibility. This news has obviously brought to light the potentially undervalued nature of other EV players such as Lucid.
Secondly, investors appear to be giving a lot of credence to the Senate passage of President Joe Biden’s infrastructure bill. Lucid’s Peter Rawlinson was recently quoted discussing the importance of government support for the EV sector in driving the successful performance of rival Tesla (NASDAQ:TSLA). He said, “Without that [funding], the Model S would have never happened … Tesla probably wouldn’t exist today. Really, the U.S. government made Tesla the success that it is today. That is a hell of an achievement.”
This sort of endorsement for government support has encouraged investors considering early-stage EV plays. If the government can singlehandedly fund the infrastructure necessary to boost the sector, companies like Lucid could see a boost. After all, a rising tide lifts all boats.
Additionally, this catalyst was backed up with a tweet stating the White House is aiming to help auto makers in general battle supply chain issues. More government support is always better. And today, it appears the stars are aligning for investors in EV stocks such as Lucid.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.