Bubble or no bubble, this is the best stock for AI exposure: analyst
Investing.com - RBC Capital maintained its Sector Perform rating and $14.00 price target on Rivian Automotive Inc (NASDAQ:RIVN) following the company’s pivot toward autonomous vehicle technology. This price target closely aligns with InvestingPro’s Fair Value assessment, while the stock currently trades at $17.53, near its 52-week high of $18.13.
The research firm expressed approval for Rivian’s strategic shift toward autonomy, particularly noting that level 3 autonomous driving capabilities will become a critical requirement for all automotive manufacturers. This strategic pivot comes as Rivian has demonstrated strong revenue growth of 28.21% over the last twelve months.
RBC Capital highlighted that Rivian’s goal of in-sourcing autonomous technology development could transform this area into a profit center for the company, which is especially significant given Rivian’s current challenges. InvestingPro data shows that while Rivian holds more cash than debt and maintains a healthy current ratio of 2.71, the company is not yet profitable, with a gross profit margin of just 3.32%.
While acknowledging the importance of Rivian’s upcoming December 11 event, the research firm emphasized that the ability to scale R2 and R3 vehicle models profitably will ultimately be more critical for investors. This focus on profitability is crucial as InvestingPro indicates analysts do not anticipate the company will be profitable this year despite its impressive year-to-date stock return of 31.8%.
The firm’s maintained rating reflects a balanced outlook on Rivian’s business prospects as the electric vehicle manufacturer navigates its technological transition while addressing production scaling challenges. Discover 11 more exclusive InvestingPro Tips and comprehensive financial analysis in the Pro Research Report available for Rivian and 1,400+ other US equities.
In other recent news, Rivian Automotive is recalling 34,824 vehicles in the United States due to a seat belt safety issue. The U.S. National Highway Traffic Safety Administration (NHTSA) reported that a damaged seat belt pretension cable could fail to properly restrain drivers, increasing the risk of injury during a crash. This recall affects certain 2022-2025 EDV models. In financial developments, Stifel raised its price target for Rivian to $17, highlighting strong third-quarter 2025 results, particularly in Software and Service revenue and a reduction in the cost of goods sold. Additionally, Tigress Financial Partners increased their price target to $25, citing Rivian’s advancements in AI and autonomy, as well as new model launches. Meanwhile, RBC Capital maintained its Sector Perform rating with a $14 price target, referencing liquidity concerns despite Rivian holding $7.1 billion in cash and short-term investments. The company anticipates an additional $2.5 billion in funding from a joint venture with Volkswagen, contingent on meeting certain technological milestones.
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