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Investing.com -- Morgan Stanley upgraded Lucid Group Inc (NASDAQ:LCID) to “Equal-Weight” from “Underweight” amid emerging potential for the electric vehicle maker to redefine its role in the growing embodied AI space.
The brokerage has a price target of $3 on the stock, while the bull case is raised to $10.
Lucid’s opportunity to develop an AI strategy through strategic and sovereign partnerships, positioning the company beyond its current status as a standalone automaker.
Analysts at Morgan Stanley (NYSE:MS) believe Lucid’s ongoing leadership changes could pave the way for a more executable AI strategy.
“We see emerging scope for Lucid’s ability to play a role in the embodied AI theme as an reshored/’friend-shored’ manufacturer with access to capital and strategic relationships that uniquely position Lucid to straddle geopolitical hurdles in potentially partnering with both China and the West,” Morgan Stanley said.
Electric vehicles could serve as the “sockets” for AI-driven autonomy. Lucid’s technology and its second-generation software-defined vehicle architecture in its Gravity SUV, offer potential pathways for partnerships in AI and autonomous driving.
On Lucid’s licensing capabilities, MS noted company’s track record in licensing EV technology, including a 2023 agreement with Aston Martin (LON:AML).
There are opportunities for Lucid to license its software and hardware expertise to legacy automakers and potentially support robotaxi operators.
Lucid’s strategic position in Saudi Arabia further enhances its AI-related optionality. The Kingdom’s growing AI infrastructure and its location as a global hub could create additional advantages for Lucid shareholders.
While the near-term outlook remains challenging, Morgan Stanley noted that changes in Lucid’s strategy, combined with shifting global supply chains and closer ties between Saudi Arabia and China, could present long-term growth opportunities.
Lucid has not yet outlined a formal AI strategy but MS expects further clarity under the new leadership.