child (NYSE: NIO) Stocks have soared this week. China has a plan to accelerate growth and the electric vehicle (EV) maker could be a big beneficiary. But even before China’s economic stimulus hits, there are signs that Nio’s business is improving.
Investors recognized that this week and sent Nio shares up about 24% late Friday morning, according to data provided by S&P Global Market Intelligence.
Green shoots for electric vehicle demand
U.S.-listed Chinese stocks received a big boost this week as China’s central bank eased monetary policy and provided fiscal support to businesses and consumers. Measures taken to increase lending, support the housing market and give owners more money to spend should give the strong electric vehicle market an even bigger tailwind.
Chinese consumers will get relief on existing mortgages and those savings could be spent on popular domestic electric vehicle deals. With the government also promising to help the struggling real estate sector and increase fiscal support if necessary, investors are trying to get into electric vehicle names before improving trading results.
Nio has already announced deliveries of more than 20,000 vehicles in each of the last four months for the first time. Investors expect that streak to extend when the company reports September results next week.
At least one Wall Street analyst following the EV leader tesla is thinking the company will beat expectations when it reports its third-quarter deliveries next week. In a report on Friday, Wedbush analyst Dan Ives said his firm believes Tesla will report up to 470,000 electric vehicle deliveries during the quarter. General expectations are 460,000 units.
Last year, about a third of Tesla’s vehicle sales came from China. Its Shanghai factory is the largest. A recovery from a slower first half of the year would also bode well for Nio. If China recovers, Nio stock could have more room to rise even after its strong rally this week.
Should you invest $1000 in Nio right now?
Before you buy shares in Nio, consider this:
He Varied and Dumb Stock Advisor The analyst team has just identified what they believe are the 10 best stocks for investors to buy now… and Nio was not one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when NVIDIA made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you would have $760,130!*
Stock Advisor provides investors with an easy-to-follow success plan, including guidance on how to build a portfolio, regular analyst updates, and two new stock picks each month. He Stock Advisor the service has more than quadrupled the return of the S&P 500 since 2002*.
See the 10 actions ยป
*Stock Advisor returns from September 23, 2024
Howard Smith has positions at Nio and Tesla. The Motley Fool has positions and recommends Tesla. The Motley Fool has a disclosure policy.
Why Nio Stock Soared More Than 20% This Week was originally published by The Motley Fool