Shares of electric vehicle charging station company ChargePoint (NYSE:CHPT) look to finally have some juice as they jump 10% higher in morning trading.
The Campbell, California-based company’s stock has been electrified by news that the House of Representatives has passed a $1 trillion bipartisan infrastructure bill that includes funding to build out the national infrastructure needed to facilitate the switch to electric vehicles.
In today’s pre-market session, CHPT stock soared more than 13% to just over $28 per share.
What Happened With CHPT Stock
Passage of President Joe Biden’s $1 trillion infrastructure bill moves the legislation a critical step closer to becoming law. And Biden himself has said that the bill will result in 500,000 electric vehicle charging stations being set up across the U.S. This will help further advance his goal of getting half of all drivers in America behind the wheel of an electric vehicle by 2030.
Specifically, the infrastructure bill provides $7.5 billion to build a network of EV charging stations. While that is a chunk of change, investors should note that it’s less than the $15 billion that Biden initially wanted. Regardless, it is a significant investment toward building out the EV infrastructure industry analysts say is sorely needed.
Biden’s comments, coupled with the House passage of the infrastructure bill, has investors grabbing CHPT stock. This is because ChargePoint is one of the biggest manufacturers of electric vehicle charging stations in the world. Currently, ChargePoint operates a global network of more than 100,000 electric vehicle charging stations spanning 14 countries. While the company, founded in 2007, remains unprofitable, its revenue this year has approached $150 million.
Why It Matters
The infrastructure bill’s allocation of $7.5 billion toward electric vehicle charging stations is great news for ChargePoint and its shareholders. Before today’s spike, CHPT stock has performed poorly, down 32% year to date, and 51% below its 52-week high of just under $50 a share. ChargePoint went public this past spring via a reverse merger executed through a special purpose acquisition company (SPAC).
Wall Street has been concerned that the rollout and adoption of electric vehicles was moving at a pace slower than the Biden administration wanted. Several U.S. automakers have said publicly that it is unlikely they will be able to meet the president’s stated goal of having half of all vehicles be fully electric by the end of the decade. This is especially true as a global shortage of semiconductors hobbles automotive manufacturing around the world.
However, with money from Washington earmarked for electric vehicle charging stations likely to flow to the states within a month after the bill is signed into law, the picture for ChargePoint and the broader electric vehicle market in the U.S. is suddenly much more positive. Accounting consultancy Deloitte has forecast that electric vehicle sales could reach 31.1 million units by 2030, up from 1.7 million sales last year (2020).
What’s Next for ChargePoint and CHPT Stock
ChargePoint shares got a big pop when the opening bell rang today. And the gains are likely to stick given that they’re based on real developments on the political front that will benefit the company financially. Going forward, CHPT stock is likely to keep climbing higher. The median price target on the shares prior to today’s move was $32.50, which implied a 32% increase over the next 12 months.
On the date of publication, Joel Baglole 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.