What Happened?
Shares of electric vehicle manufacturer Rivian (NASDAQ:RIVN) fell 3.3% in the afternoon session after Morgan Stanley downgraded the company's stock to "Underweight" from "Equal Weight.". The investment bank set a price target of $12.00, citing significant risks associated with the company's planned R2 vehicle launch in 2026. Analysts pointed to a challenging electric vehicle market as a major headwind. Key concerns included a general slowdown in EV adoption by consumers and the loss of the $7,500 federal tax credit for the new model. Furthermore, the bank noted persistent consumer worries about vehicle range, the availability of charging infrastructure, and overall affordability in the current market.
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What Is The Market Telling Us
Rivian’s shares are extremely volatile and have had 31 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 18 days ago when the stock gained 5.1% on the news that strong results from chipmaker Nvidia eased lingering concerns about a potential bubble, especially in the tech sector.
The tech giant delivered another blockbuster earnings report, with sales, profits, and guidance exceeding Wall Street expectations. CEO Jensen Huang let the data do the talking as he acknowledged the growing sentiment about an AI bubble, while affirming that sales for Nvidia's current-generation GPU, called Blackwell (mostly used for AI applications), are "off the charts." A stronger-than-expected September jobs report from the Bureau of Labor Statistics reinforced this bullish sentiment. Nonfarm payrolls rose by 119,000, easily surpassing the consensus estimates of 50,000. While the unemployment rate ticked up to 4.4% and wage growth slowed slightly, the data suggest the U.S. economy remains on a firm footing. While this resilience made some investors unsure of the Fed's December rate decision, the market welcomed the news, rallying on the strength of a solid economy and a booming tech sector.
Rivian is up 31.2% since the beginning of the year, and at $17.39 per share, it is trading close to its 52-week high of $18.06 from December 2025. Investors who bought $1,000 worth of Rivian’s shares at the IPO in November 2021 would now be looking at an investment worth $172.59.
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