Lucid (LCID 5.39%) got an upgrade today, and the stock is soaring. However, overall, shares of the luxury electric vehicle (EV) maker aren't having a good start to the year. Even after rising 12.3% this morning as of 10:25 a.m. ET, the stock is down by nearly 20% year to date.
The company should have a pivotal year, though, and one analyst thinks its shares have dropped too far.
Is Lucid an AI stock?
Morgan Stanley's Adam Jonas is taking a more bullish stance on Lucid, reports Barron's. The analyst just upgraded his rating to the equivalent of a hold. He previously didn't recommend owning the stock. So what changed?
Jonas didn't adjust his price target on the shares. That remains at $3 per share, which represents almost 40% upside from Monday's closing price. So to some degree, the Wall Street analyst is just catching up with the stock's prior movement lower.
But Jonas also thinks a new CEO could take the company in a new direction. Lucid recently announced that longtime CEO Peter Rawlinson was stepping down from that role. Jonas believes new management can leverage technology in the artificial intelligence (AI) sector.
Lucid's battery technology is cutting edge. Its Air Grand Touring sedan boasts the longest range in the industry at over 500 miles on a single charge. But it is not known for advanced driver assistance or autonomous driving technology. Jonas thinks the company is in a position to utilize AI advancements for that purpose.
He cites its relationship with the Saudi Arabian government as one key factor. A Saudi sovereign fund is Lucid's majority shareholder. That relationship could facilitate AI partnerships.
If so, Lucid could leverage that to improve sales both domestically and overseas. Lucid has just launched its new Gravity SUV to go along with its Air sedan offerings. The company expects to more than double production year over year in 2025.
So does Lucid have power?
Investors appear to be overreacting to Jonas' report. Speculating on how Lucid might utilize AI technology isn't a reason to buy. Even Jonas still says to just hold the stock.
