Rivian Automotive (RIVN 6.10%) stock is getting caught up in fallout from another company's electric vehicle (EV) announcement yesterday. Rivian shares sank more than 5% in early trading Wednesday.
That's because tech titan Apple said it was ending a decade-long project to develop its own electric car. Some investors saw that as one more sign that EV demand is never going to be as strong as some initially thought. But Rivian shares recovered from today's early drop, and there's a good reason for that, too. As of 10:30 a.m. ET, Rivian shares had turned slightly positive by 0.2%.
Is Rivian a fit for Apple?
That recovery may be tied to what widely followed tech analyst Gene Munster said in a CNBC interview late yesterday. Munster, managing partner at Deepwater Asset Management, said he was shocked that Apple dropped its EV project. In discussing the move, Munster said that Apple still needs to do something big, and "potentially Rivian would be just the answer to that."
A softer EV demand environment has been the cause of much angst among investors in EV start-ups like Rivian. Rivian shares have plunged nearly 30% in just the past month.
Rivian only expects to produce 57,000 vehicles this year. That's roughly the same as 2023 and lower than the 66,000 expected by analysts. That has some wondering whether Rivian has enough cash to make it until its next-generation R2 platform is launched in 2026.
Munster, of course, was just speculating on what Apple might do in the future. The company said much of its EV project workforce would shift to developing artificial intelligence (AI) technologies. But AI is starting to be used in many sectors, including manufacturing.
Apple may consider bringing an existing EV maker into its fold. But investors shouldn't be buying Rivian on Munster's speculation. The real question is whether the EV demand environment will strengthen.
