What happened
Shares of Tesla (TSLA 0.96%) rival Rivian Automotive (RIVN 1.83%) are tearing up the track Monday, rising a lucky 7.77% as of 11:25 a.m. ET as investors parse an upgrade for Tesla ... and wonder what it might mean for Rivian, too.
So what
This morning, as you may have heard, Swiss megabank Credit Suisse upgraded shares of Tesla stock to outperform.
Credit Suisse had many reasons for why it loves Tesla -- fast growth, high profit margins, and the potential to earn as much as 25% more this year than anyone else on Wall Street thinks possible. And all that's great news for Tesla -- but what does it have to do with Rivian?
Well, in wrapping up its note, Credit Suisse pointed out that one advantage Tesla has over legacy automakers such as Ford and General Motors is that, as a pure-play electric vehicle (EV) maker, Tesla does not need to "tackle the challenges" that the other companies have as they switch from doing what they're good at (gasoline cars) to doing what they're new at (electric cars).
Image source: Rivian.
Now what
That's an advantage that will accrue to Rivian as well, as it builds a clean-slate EV business without all the added costs of trying to transition from an existing internal combustion engine car business. And that's not the only arguable advantage that both Telsa and Rivian possess.
Credit Suisse noted, for example, that Tesla's vertical integration is an advantage (and that's true for Rivian as well), as is Tesla's "capital availability" -- and with Rivian believed to have amassed $20 billion in cash to fuel its growth, that should apply to Rivian, too.
Long story short, if you buy Credit Suisse's bull thesis on Tesla, there's a lot for investors to like about Rivian stock as well.
