What Happened?
Shares of luxury electric car manufacturer Lucid (NASDAQ: LCID) jumped 13% in the morning session after Morgan Stanley analyst Adam Jonas upgraded the stock's rating from Sell to Hold, highlighting the "balanced risk/reward." The analyst added, "We see emerging scope for Lucid's ability to play a role in the embodied AI theme as an reshored/'friend-shored' manufacturer with access to capital and strategic relationships that uniquely position Lucid to straddle geopolitical hurdles in potentially partnering with both China and the West.".
Is now the time to buy Lucid? Access our full analysis report here, it’s free.
What The Market Is Telling Us
Lucid’s shares are extremely volatile and have had 55 moves greater than 5% over the last year. But moves this big are rare even for Lucid and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 5 months ago when the stock dropped 19.5% on the news that the company announced an underwritten public offering of roughly 262 million shares of its common stock.
Separately, majority stockholder Ayar Third Investment Company, an affiliate of Saudi Arabia's Public Investment Fund, agreed to buy 375 million shares of common stock from Lucid in a private placement. Following the deal, Ayar was expected to maintain approximately 58.8% ownership of Lucid's common stock.
Overall, Lucid was expected to raise gross proceeds of $1.67 billion from the offerings.
Separately, the company provided preliminary operating loss guidance of $765 million and $790 million for the third quarter (2024), below analysts' expectations.
Lucid is down 18.8% since the beginning of the year, and at $2.45 per share, it is trading 42.5% below its 52-week high of $4.26 from August 2024. Investors who bought $1,000 worth of Lucid’s shares at the IPO in September 2020 would now be looking at an investment worth $248.74.
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. We prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.
