What happened
The share price of Rivian Automotive (RIVN 6.10%), an electric vehicle (EV) company, skyrocketed this morning on seemingly no company-specific news. Instead, investors may be taking a second look at the EV stock and seeing a buying opportunity after its share price plummeted over the past six months.
Rivian was up by 10.6% as of 11:40 a.m. ET.
So what
Its share price has fallen 49% over the past six months as many investors have fled high-growth stocks -- and EV stocks in particular -- as they've processed information about sky-high inflation, interest rate increases by the Federal Reserve, and the war in Ukraine.
Image source: Getty Images.
All those things have caused some investors to think more conservatively about their investments and sell off some of their stock positions -- sending the S&P 500 down 3.7% over the past three months.
But with Rivian's share price falling so far so fast, some investors are likely now viewing its stock as being priced attractively. For example, the company's stock made its market debut back in November at $78 per share, but even with today's gains, Rivian's stock sells for about $50 per share.
Some investors may also be reacting to news that came out yesterday that Tesla wants to split its stock again. The EV company last split its stock in August 2020, and since then its share price has more than doubled.
While Tesla potentially splitting its stock doesn't directly have anything to do with Rivian, investors often get excited when there's momentum for another company in the same industry. So interest in Tesla's stock right now could be having a spillover effect for other EV makers like Rivian.
Now what
Rivian is still dealing with supply chain constraints, and rising inflation has forced the company to increase its vehicle prices. These current hurdles have slowed its growth, but long-term investors may want to keep an eye on this company.
Rivian's move into the EV pickup truck space could help it carve out a niche in the segment at a time when other electric vehicle companies are trying to find their footing. Rivian certainly has an uphill battle ahead of it, but with the EV industry just getting started, there's plenty of time for it to prove itself.
