Rivian Automotive (NASDAQ: RIVN) is an all-electric automotive manufacturer founded in 2009. Their premier products are the Rivian SUV, the R1S, and the Rivian pickup truck, the R1T. The company utilizes an adaptable platform that they can use for future vehicles or adopted by other automakers. Its biggest shareholder is Amazon.com Inc., which has a 16.54% stake.
Recent Stock Performance
Rivian Automotive stock (RIVN) soared 13.97% at the close of trading on December 14, 2023. The stock has performed well throughout 2023, rising 29.35% year-to-date. The current $22.43 per share is close to its 52-week high of $28.06.
Its value is significantly higher than its 50-day and 200-day moving averages of $17.60 and $17.99, respectively. The stock is up 3.70% in pre-market trading.
Why Rivian Automotive Stock Is Rising
RIVN stock experienced a 13.97% rise in value on December 14, 2023, after AT&T revealed that they had signed a deal with Rivian.
The deal will see AT&T, one of the largest telecommunications companies in the world, purchase Rivian Automotive electric vehicles for its fleet. It is part of a pilot program by the telecom company to cut transport emissions.
The deal will see AT&T add R1 vehicles and the Rivian Commercial Van to its fleet starting in early 2024. They will use the trial to see how to cut costs, improve safety, and reduce their carbon footprint. The pilot program is part of AT&T’s commitment to become carbon neutral by 2035.
It is not the first time the two companies are working together. AT&T is already the connectivity provider for all Rivian’s vehicles in Canada and the US. The deal allows Rivian trucks to receive OTA updates to improve the vehicles’ performance.
Why the AT&T Deal Matters
The deal represents the first time Rivian has gotten a customer for its commercial van outside of Amazon. Rivian signed an agreement with Amazon for 100,000 commercial vans, which has played an essential role in keeping them viable. However, in its Q3 earnings report, Rivian announced it ended its exclusivity agreement with Amazon for all-electric vehicles.
Rivian Automotive Stock forecast
Since Rivian released its Q3 earnings report, the stock has been rising. In the past month, the stock is up 30.10%. Investors feel optimistic about its potential, with the optimism boosted by its production guidance.
Additionally, the Fed has signaled that it will no longer raise rates, which is great for carmakers. Many analysts are now predicting rate cuts in 2023. Rivian Automotive plans to begin construction of a new production facility in early 2024. Its deal with AT&T signals demand beyond Amazon for its commercial vans.
Wall Street analysts have given RIVN stock a moderate buy rating based on its recent performance. Their highest target for the stock is $44, and the lowest is $15. The average target for RIVN stock is $26.89, a 19.88% upside on the last price of $22.43.
Should You Buy RIVN Stock?
Rivian Automotive’s deal with AT&T could signal demand for its line of commercial vans in 2024. With a new plant coming up and a production guidance of 54,000 in its last earnings report, the future looks bright for the company.
Rivian Automotive also managed to reduce its net loss to $1.4 billion, compared to the $1.7 billion reported in the same time last year. However, the release of the Tesla Cybertruck could soften demand for the Rivian R1T. Despite this potential challenge, the moderate buy rating accurately represents the future of RIVN stock.
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