Investing

Does Rivian Have a Long Future?

Joey Frenette

Published: December 13, 2024 4:39 pm

Today, it’s incredibly hard to be an electric vehicle (EV) maker if you’re not Tesla (NASDAQ:TSLA). Indeed, it’s not hard to imagine that countless gain-hungry investors and traders have tried to spot the next up-and-coming EV player over the years, only to run into significant losses. And though the playing field will eventually even out as more EV firms step up their game to better compete against Elon Musk’s empire, I still think it’s a much safer mover to simply bet on the EV pioneer itself.

Despite its massive size, Tesla stock has continued to reward investors for their time and patience. With shares of TSLA recently skyrocketing to hit a new all-time high after many years of correcting in a rather volatile fashion, it’s clear that the EV top dog is back in the driver’s seat as it hits the gas on its robotaxi ambitions, thanks to Elon Musk’s new efficiency role under the Trump administration. Indeed, one has to think that Musk’s favors will not go unreciprocated.

24/7 Wall Street Key Points:

• If Rivian can take share, it could not only have a long future but a very bright one.
• Its strong EV lineup can and potentially will take share once consumer spending really has a chance to picks up.
• If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.

Either way, it’s quite amusing just how quickly autonomous vehicles (AVs) and robotaxis went from a reach to becoming a realistic medium-term driver of growth. Undoubtedly, I don’t think it’s fair to compare rival EV makers, like Rivian (NASDAQ:RIVN), to Tesla anymore, given it’s now more of an artificial intelligence (AI) tech titan than an automaker.

In any case, the auto industry has pulled the brakes heavily, and until consumers are comfortable enough to spend on one of the biggest expenditures they’ll ever make — perhaps only second to a down payment on a house — it seems discouraging to be a shareholder in almost any one of Tesla’s up-and-coming rivals.

Rivian stock is gaining traction. Is a long, bright future ahead?

In this piece, we’ll have a closer look at Rivian and its newfound momentum, which may very well carry about into the new year. While catching Tesla may be out of the question, I do think there are new developments that make shares of the EV firm a pretty sound value at current levels.

Given how badly punished the name has been since it stormed out of the gate on the public markets back in late 2021, I think a strong case can be made that Rivian is more of a deep-value option for true contrarians.

Of course, some skeptics and bears may question whether the company will have a long future. After all, operating an EV business is not cheap. Given the many EV firms that have failed over the years, it’s a fair question to ask, in my humble opinion.

For Rivian, I think its future is bright, provided management can execute the share-taking opportunity presented before it. Indeed, Rivian has a nice-looking EV. However, it needs to scale up production efficiently while giving prospective buyers a reason to buy its truck over Tesla’s offering, the Cybertruck, which, I believe, isn’t as impressive as a Rivian in terms of look and function.

Rivian faces a “massive market opportunity,” according to a big-name analyst on Wall Street.

Recently, Benchmark analyst Mickey Legg started RIVN stock with a solid $18.00 per-share target alongside a Buy (equivalent of overweight) rating — that’s close to a 27% gain from Thursday’s closing price. Mr. Legg views the company as poised to “accelerate” its domestic EV production in the next few years, noting the likelihood it will “further accelerate in 2026 to 2027.”

Now, Rivian EVs do not come cheap. They’re luxury vehicles that tend to sell better when economic times are good. If you’re betting on a “roaring 20s” environment under Trump’s presidency, perhaps Rivian could be a rewarding comeback play, especially if the firm can face a sudden uptick in demand (from around 50,000 in 2023).

Either way, I view Rivian as well-equipped to give Tesla a good run for its money. In fact, I think its R1T truck and R1s SUVs may gain the edge over the next few years. Of course, Rivian doesn’t have an AI growth engine that Tesla does, but if you’re looking for relative value and think the autos are poised to roll higher in the coming years, RIVN stock may be the name to watch.

In short, I think Rivian not only has a long future but a potentially bright one as it looks to take market share with a slate of pricey but very strong lineup with its R1T and R1S.