Nikola (NASDAQ:NKLA) stock is up more than 25% in just the past three trading sessions, pushing the company up more than 100% since early July. This has fueled speculation that the historically troubled electric vehicle (EV) maker may be the newest member of the “meme stock” club.
Is Nikola the next meme stock about to blow up?
Well, maybe. Nikola’s recent stock price growth is a response to a number of promising news items for the EV maker. Nikola’s rally first dates back to June, when NKLA stock traded for under $1 per share and had received a delisting notice from the Nasdaq. Since then, however, Nikola has had nothing but nice things to say to investors.
Indeed, in early July, Nikola announced securing a $42 million grant to construct six hydrogen refueling stations throughout southern California. Earlier this week, the company also announced another $16.3 million grant. Additionally, the company recently surpassed 200 orders for its Class 8 electric trucks. This includes a purchase from the likes of JB Hunt Transport (NASDAQ:JBHT), which announced an order on Monday.
“Over the past two months each big move coincided with a spike in net retail purchases,” Vanda’s Marco Iachini told Bloomberg.
NKLA Stock Soars Amid Meme Stock Speculation?
Nikola’s status as a meme stock remains tenuous. While the company has enjoyed an unexpected stock rally that started just as NKLA was on the brink of delisting — a notorious meme-stock indicator — its growth hasn’t been for nothing.
Historically, only companies with little-to-no lifeline, typically in industries considered doomed long-term, get the true meme treatment. This usually comes as part of an organized short squeeze effort around the stock.
Nikola is a high-growth electric truck maker with a relatively impressive customer list. Its recent announcements have pushed NKLA stock to $3 per share, well above the point of delisting.
As such, NKLA is missing a few crucial features common among other infamous meme stocks that have taken off. Most recently, this includes Tupperware (NYSE:TUP) stock, which has soared around 400% in the past month off the back of a clear short squeeze campaign.
Nikola isn’t quite out of the woods yet. The company remains a point of controversy, especially given it’s less-than-stellar past. But to denounce Nikola’s recent progress as part of a meme-stock feeding frenzy may be a bit shortsighted.
On the date of publication, Shrey Dua did not hold (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.
