Shares of electric vehicle maker Rivian Automotive (RIVN 8.11%) have been soaring this year, up more than 40% since January. They're on track for their best performance since the company went public back in 2021. Last year, they were down by 43% and the year before that, they rose by 27%. And in 2022, when the market crashed, Rivian's shares tanked by a staggering 82%.
For years, Rivian has struggled to win over growth investors due to its poor financial results, but things have been looking much better for shareholders of late. The big question, however, is whether this rally can continue in 2026 or if the automotive stock may be due for a decline in the near future.
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Why has Rivian's stock done so well in 2025?
For much of the year, Rivian's stock hasn't been taking off, and it's only recently that it has been surging in value. The big catalyst came early in November, when the company posted its third-quarter results. For the period ending Sept. 30, its sales rose by 78% to $1.6 billion, which came in better than analyst expectations of $1.5 billion. Its adjusted loss per share of $0.65 was also not as bad as the $0.72 that Wall Street was projecting.
Then, earlier this month, the company held an "Autonomy & AI Day" which highlighted its efforts and investments in artificial intelligence (AI). The company says that its newest hardware will feature "a leading combination of vehicle sensors and inference available in North America." The announcements led to the stock hitting a new 52-week high.
Has Rivian proven that it's a safer stock to own?
A big part of the reason for Rivian's struggles in recent years has been due to the risk and rising competition in the EV market. With Rivian demonstrating strong growth and reducing its losses, that may have led to investors believing that it's a safer stock to own of late.
However, I wouldn't rush to that conclusion just yet. Rivian's gross profit margin for the past quarter was only 2%. Although that's an improvement from the negative margins it has sometimes reported, that's by no means a great achievement. Its revenue is also fairly modest overall, and a big year-over-year increase is a lot easier for Rivian to achieve than a larger EV player, such as Tesla, which generates more than $20 billion in revenue per quarter.
Rivian still has a long way to go in proving that it can be a big competitor in the EV space. An increase in competition in the industry has led to Tesla's margins shrinking, and that doesn't bode well for Rivian in the long run. Even though it's doing well recently, it's hard to make the case that Rivian's stock has become much safer.
NASDAQ: RIVN
Key Data Points
Is Rivian's stock a good buy for 2026?
Rivian's stock is having a great year in 2025, but over the past five years, it's still been an abysmal investment overall, with losses totaling more than 80% during that time frame. And between a better-than-expected quarter and encouraging AI-related news, it has given investors some reason to be excited and positive about the business. With so much negativity already priced in, that may have simply been enough to get the stock moving upward in recent weeks.
However, with challenging economic conditions and consumers cutting back on discretionary purchases, I wouldn't expect 2026 to be another strong year for Rivian. Instead, I could see the EV stock give back some gains next year. Its recent rally may be encouraging and exciting, but that doesn't mean it's likely to continue. Given all the risks and its poor fundamentals, Rivian is a stock I'd steer clear of.
