What happened
With the technology-heavy Nasdaq Composite index surging more than 6% in late trading today, it's not surprising to see riskier growth stocks also bouncing after a down week. That includes electric vehicle (EV) supply and service companies like charging network operators and battery makers.
ChargePoint Holdings (CHPT -2.61%) and Blink Charging (BLNK -1.70%) are holding on to large gains as the market nears its close. Solid-state battery maker QuantumScape (QS -1.12%) lost much of its early 15% gain, however. As of 3:40 p.m. ET, ChargePoint and Blink were higher by 13.1% and 14.3%, respectively. QuantumScape was still up by only 6.8% at that time.
So what
There may be good reason for that discrepancy, though. QuantumScape shares were bouncing from a sharp decline yesterday. But the company itself is still several years away from the potential to commercialize its battery technology. Investors feel insecure putting money into a company like that in the current rising interest rate environment.
Today's Consumer Price Index (CPI) data was still a positive development for growth stocks, though, helping to explain the move higher today. That data showed prices moved up by just 0.4% in October, which was less than the 0.6% economists expected. The index itself climbed 7.7% on an annual basis. That was also below expectations and was a large drop from September's 8.2% annual rate.
Image source: Getty Images.
While neither ChargePoint nor Blink Charging are profitable yet, they both are generating revenue. And the third-quarter results Blink reported earlier this week have investors feeling better about both stocks. ChargePoint won't report until later, since its fiscal quarter ended Oct. 31, but Blink's results have investors hopeful when they do.
Now what
Blink's revenue in the third quarter jumped 169% versus the prior-year period. For the first nine months of 2022, total revenue has nearly tripled compared with the prior year. Losses increased year over year, but that was expected as the company works to grow revenue through organic growth and acquisitions.
Even with that growth, Blink is still much smaller than ChargePoint. Blink generated $38.5 million in sales in 2022 through September. ChargePoint expects to have full-year revenue of as much as $500 million. If it hits that figure, it would be more than twice the prior fiscal year revenue. Investors may see Blink's results as a sign that ChargePoint could beat its previous expectations.
Today's inflation data, combined with the optimism from Blink Charging's quarterly report, explains the outperformance of both EV charging network companies today.
