What Happened?
Shares of electric vehicle manufacturer Rivian (NASDAQ: RIVN) jumped 14.1% in the afternoon session after the company announced ambitious plans for autonomous driving technology, including a proprietary AI chip, during its inaugural Autonomy & AI Day.
The new in-house chip, named the Rivian Autonomy Processor, was designed to power its future self-driving features, replacing processors from Nvidia in upcoming vehicles. By developing its own custom silicon, the company aimed to reduce dependence on outside suppliers. Rivian also unveiled a new paid driver-assistance package called Autonomy+, priced at $2,500 as a one-time payment or $49.99 per month, which was significantly below the cost of Tesla's competing system. Following the announcements, analysts reacted positively, with brokerage Needham and Co raising its price target on the stock by 64% to $23 per share.
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What Is The Market Telling Us
Rivian’s shares are extremely volatile and have had 32 moves greater than 5% over the last year. But moves this big are rare even for Rivian and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 1 day ago when the stock dropped 5.6% on the news that Morgan Stanley downgraded the stock to 'Underweight', citing a cautious outlook for the electric vehicle market and risks tied to the company's future product launch.
The investment bank pointed to concerns about the broader EV market and specific risks associated with Rivian's planned R2 launch in 2026. The downgrade also reflected worries about the company's smaller scale and financial challenges when compared to its rivals. This move came despite some other firms, like Stifel and Tigress Financial, maintaining their 'Buy' ratings on the stock. Overall, Wall Street sentiment remained cautious, with a consensus 'Hold' rating from analysts.
Rivian is up 40% since the beginning of the year, and at $18.55 per share, has set a new 52-week high. Investors who bought $1,000 worth of Rivian’s shares at the IPO in November 2021 would now be looking at an investment worth $184.11.
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