Nio Inc (NIO)

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Why NIO Stock Is Up By 5% Today
By: Vladimir Zernov | February 15, 2022

• The stock is trying to settle above the $25 level.

NIO Stock Gains Ground As EV Stocks Rebound

Shares of NIO gained strong upside momentum amid increased demand for electric vehicle stocks during a rebound led by Tesla.

The beginning of this year has been challenging for EV stocks as traders moved out of high-PE names while Treasury yields moved higher.

According to a recent report, NIO has launched the development of a sub-brand model. The model would have an annual production capacity of 60,000 units. It should be noted that this report had a limited impact on the dynamics of NIO stock as traders focused on general market sentiment towards EV stocks.

What’s Next For NIO Stock?

Analysts expect that NIO will report a loss of $0.22 per share in 2022, but the company is expected to be profitable in 2023.

NIO stock touched highs near the $67 level back at the beginning of 2021, and it has already lost more than 60% of its value during a year-long pullback. In NIO’s case, the general bearish sentiment towards Chinese stocks has clearly added to the pressure.

Shares of NIO will likely remain sensitive to the fluctuations of market sentiment towards EV stocks at a time when the Fed is ready to raise rates. On the one hand, NIO stock has already suffered a major pullback so it may attract speculative traders who want to bet on the future of the EV industry and do not want to limit their portfolio to Tesla stock. On the other hand, rising rates and skepticism towards Chinese stocks may continue to put pressure on NIO shares.

In the longer term, traders will stay focused on earnings forecasts as a move from the loss-making status to the profitable status often provides a major boost to a company’s stock. If the market sees that the path to profitability is clear, NIO stock may gain significant upside momentum.

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