Today’s session has been excellent so far for Rivian (NASDAQ:RIVN) stock. Known for making electric trucks and SUVs, Rivian recently added an important name to its investor list. Yesterday, Volkswagen (OTCMKTS:VWAGY) announced that it will be investing up to $5 billion in the company. RIVN stock has been surging since the news broke.
After a difficult past two quarters and a highly volatile year, Rivian certainly needed a growth-driving catalyst. Now that it has one, this electric vehicle (EV) producer seems to finally be beginning a long overdue turnaround.
What’s Happening With RIVN Stock?
News of the Volkswagen investment sent RIVN stock soaring in after hours trading yesterday. So far, this growth hasn’t slowed down today. As of this writing, shares are up 28% for the day and look primed to keep rising. That’s partially because Wall Street sentiment toward RIVN has turned extremely positive. One particular sector expert is particularly optimistic about the EV firm’s prospects.
Wedbush analyst Dan Ives is known for his expertise on EV growth stocks. Following the Volkswagen investment announcement, Ives raised his RIVN stock price target from $15 to $20, implying upside potential of roughly 30%. The analyst broke down his bullish take on shares:
“Rivian will leverage this opportunity by utilizing this robust capital roadmap to support future growth while vertically integrating its software platform and electrical architecture while achieving further cost savings and deliver improved vehicles down the line.”
Ives isn’t the only expert who sees big things ahead for this company. Evercore ISI just gave shares a “buy” rating and $20 price target. Yesterday, the stock also received an $18 price target from Guggenheim. The analyst firm predicted a “credible path to breakeven gross margin in 4Q24.”
Why It Matters
The fact that Wall Street is by and large optimistic about Rivian’s latest development should tell investors everything they need to know. Yes, it may seem a bit odd that an industry-leading automaker is staking a massive bet on an EV startup. But Volkswagen wouldn’t be betting on Rivian if it didn’t see significant potential in the smaller company. It’s also worth noting that the popular Rivian R1T recently set a new record. Other experts continue to flag Rivian as a formidable competitor to Tesla (NASDAQ:TSLA) as the EV leader continues to struggle.
Ives notes that Wall Street will now be closely watching Rivian’s “production and optimization for its new vehicles,” particularly with regards to its Georgia auto plant. But there’s no question that experts see a turnaround in store for RIVN stock as Volkswagen throws its weight behind the company.
On the date of publication, Samuel O’Brient 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.
