What Is Going on With Li Auto (LI) Stock Today?

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  • Shares of Li Auto (LI) are surging today, despite missing delivery numbers.
  • This move comes as reports of a newly approved Chinese Covid-19 vaccine circulate.
  • Unsubstantiated rumors around the removal of Covid-19 lockdown restrictions have investors looking at Chinese stocks once again.
LI stock - What Is Going on With Li Auto (LI) Stock Today?

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One of today’s most-watched movers is Chinese electric vehicle (EV) maker Li Auto (NASDAQ:LI). Despite relative choppiness in today’s market, investors in this EV stock appear to be getting bullish at an interesting time. Today, LI stock has surged more than 14% at the time of writing.

This move follows a key delivery update provided yesterday by the company. Li reported deliveries of 10,052 vehicles in October. While that represented a 31.4% increase year-over-year, the market had expected more. Accordingly, some surprise has been leveled at Li’s price action in recent days.

That said, most of the enthusiasm investors appear to be seeing with Chinese stocks right now is tied to an announced move by the Chinese government to approve a new vaccine to battle Covid-19. Additionally, unsubstantiated claims are spreading on social media that the Chinese Communist Party is looking to find an off-ramp to end its zero-Covid policies. This has many investors excited about beaten-down Chinese stocks.

Let’s dive into what this all means for Li Auto right now.

Why Is LI Stock Surging Today?

Undoubtedly, Li’s deliveries miss this past month has intimate ties to China’s Covid-zero policy and rampant lockdowns across the country. While Li’s facilities may not be directly impacted, supply chains in China are becoming ensnared by city-wide lockdowns. Accordingly, any sort of positive news that the country is looking to move away from these draconian policies is a boon for stocks.

Indeed, market participants seem to be latching onto these unsubstantiated rumors in a big way. If Chinese officials remove various restrictions and allow economic activity to resume, Li’s sales numbers could see a big boost. Thus, despite rather weak results of late, the market doesn’t seem to care. It’s a forward-looking mechanism after all. Today’s reports could signal sunshine on the horizon. That’s something many investors have longed to see among these Chinese names for some time.

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.


Article printed from InvestorPlace Media, https://investorplace.com/2022/11/what-is-going-on-with-li-auto-li-stock-today/.

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