Lucid (LCID, Financial) just got a boost from Morgan Stanley, and the stock jumped over 11.5% at 12.52pm—but let's not get carried away. The stock is still down nearly 20% this year, and the upgrade from analyst Adam Jonas wasn't exactly a ringing endorsement. He moved Lucid from a Sell to a Hold, keeping his price target at $3, which implies nearly 40% upside from recent levels. The change comes as Lucid undergoes a leadership shakeup, with Marc Winterhoff stepping in as an interim CEO. Jonas sees an opportunity for Lucid to lean into AI and tech partnerships, particularly through its ties with Saudi Arabia, its majority shareholder.
The EV maker has solid battery technology—its Air Grand Touring sedan boasts the longest range in the industry. But when it comes to AI-driven autonomy and driver assistance, Lucid is playing catch-up. Jonas suggests the company could leverage its international connections to accelerate AI adoption, potentially boosting its competitiveness. Lucid is also ramping up production, aiming to more than double its output in 2025, thanks to the introduction of its Gravity SUV. Still, Wall Street isn't convinced. Only 18% of analysts have a Buy rating on Lucid, well below the S&P 500 average of 55%, signaling skepticism about its execution.
Today's rally is more about sentiment than substance. Jonas' upgrade seems like a reality check rather than a bullish call, and the broader EV market remains a tough place to be. Slowing sales growth and intensifying competition could keep pressure on Lucid, and speculation around AI won't mean much unless the company delivers. Investors betting on a turnaround should keep a close eye on execution—because without real progress, this stock could struggle to maintain momentum.
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