Despite another up day for many of the biggest and best electric vehicle (EV) players, Nio (NYSE:NIO) isn’t feeling the love. Currently, NIO stock is down a little less than 2% as investors continue to debate which EV stocks are the best options in this uncertain market.
Nio is well-known for its high-quality cars and its core focus on its home market in China. This has appealed to many foreign investors seeking exposure to the Chinese EV scene.
Thus, seeing more foreign investors join the fray shouldn’t be surprising. As fellow InvestorPlace contributor Shrey Dua pointed out today, the Saudi-owned CYVN Holdings has taken a significant position in Nio, buying 84.6 million shares of Nio stock for a total investment of $738.5 million. That’s good for a position of roughly 5% in Nio, making the Saudi government one of the top shareholders in this Chinese giant.
Additionally, positive sentiment is building around Nio’s upcoming annual general meeting on June 26 and any positive announcements that may arise out of that meeting. Analysts from Bank of America are growing increasingly bullish on Nio’s revenue and margin growth in Q3 and Q4 of this year. Indeed, a number of factors are converging that appear to be pointing to a run higher for NIO stock.
Let’s dive into what to make of these catalysts right now.
Can NIO Stock Continue to Move Higher?
The discussion around Nio is intriguing right now. On the one hand, Chinese policymakers have taken a harsh approach to regulating key industries. And while Chinese EV companies will likely continue to see preferential treatment from the government, as we’ve seen with many tech stocks, the rug can be pulled out at any time.
On the other hand, foreign investors are right to be bullish on Nio’s long-term upside potential. The Chinese EV market is absolutely massive, even relative to the U.S. and Europe (as a region). As more folks enter the middle class, the ultimate market for EVs will be enormous, leading to outsized gains for early investors.
Additionally, Nio’s upcoming earnings reports will likely shed more light on how the company is performing with its ET5 model. As new models continue to add to the company’s top- and bottom-line metrics, this is a stock that could see some fundamental support for a surge higher. Or, at least, the Saudis hope.
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.
