What happened
Rivian Automotive (RIVN 2.83%) popped 10.6% on Monday as investors piled back into the electric vehicle (EV) company's shares.
So what
There doesn't appear to be any company-specific news that spurred Rivian's gains today. However, several factors likely contributed to its sharp upwards move.
Stock trading volumes tend to be lower during the final week of the year, so price movements can be more severe than at times when more shares are traded. Additionally, traders often are more bullish during this time, as they seek to profit from the so-called Santa Claus rally. The stock markets have historically performed well during the five days after Christmas and the first two days of the new year.
This bullishness may have led investors to take a more positive view of Rivian and other growth stocks, many of which have seen their share prices decline sharply in recent weeks.
Image source: Getty Images.
Now what
Rivian's future appears particularly bright. The EV maker is enjoying surging demand for its vehicles. Preorders for its R1T pickup truck rose from approximately 48,000 at the end of the third quarter to 71,000 by Dec. 15.
To meet this demand, Rivian is rapidly expanding its manufacturing network. The company is investing $5 billion to build a new plant in Georgia. The facility is forecasted to assemble as many as 400,000 vehicles annually at peak output, with production anticipated to start in 2024.
Rivian also has valuable backing from Amazon.com (AMZN 3.89%). The e-commerce juggernaut owns roughly 20% of the EV upstart's shares. Amazon has placed a massive order for 100,000 delivery vans, which gives Rivian tremendous visibility into its revenue outlook, as well as the ability to spend more aggressively to ramp up its vehicle production rates.
