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Can Lucid Stock Clear Up? This Is What You Need to Know By TipRanks


© Reuters. Is Lucid stock on the rise? This Is What You Need to Know

EV stocks have witnessed quite a decent amount of interest from investors over the past few years. These stocks have seen a surge in interest from investors due to a variety of factors. Investors’ enthusiasm for EV stocks is largely due to the phenomenal growth of incumbents like Tesla (NASDAQ;), and the bullish political environment for electric cars created by the American Jobs Plan.

This narrative is strong for investors who are looking for strong secular tailwinds. But, there seems to be a decrease in the bullish sentiment regarding EV stocks (like Lucid Group) lately. For the past six-months, Lucid stock has shown significant volatility in a small band.

However, worries about the global shortage in semiconductors continue to plague EV production. Conservative investors still find it difficult to appreciate EV stocks in relation to high-growth sector. The potential slowing of demand as a result of economic issues that arose from the Delta variation has seen hyper-growth sectors experience some cooling.

Lucid, however, remains an intriguing investment opportunity in the early stages of EV. Let’s look at some of the things investors should be keeping an eye out for with this promising growth stock.

Factors Pressuring LCID Stock

There are a couple of key factors responsible for much of the recent pressure LCID stock has seen from the market. 

Some investors may have seen significant selling towards the end August. This could be due to September’s expiration for lockup provisions. It appeared that investors were trying to get ahead of possible selling pressure. Fortunately for investors, insiders didn’t sell en masse which led to a rebound in LCID stock levels to mid-August.

As of late, there has been more concern about insider selling within various SPACs as well as de-SPAC businesses. These high-growth speculative investments can be a hassle for investors. New investors who invest in these high-growth growth vehicles could be hurt if large amounts of shares are sold. Although this is not the case for LCID stock at present, investors seem to be acutely aware.

In the short-term, it appears that sentiment will play a greater role in the performance of LCID stock. It’s possible that LCID stock will rise if investors are comfortable placing bets on de-SPAC and SPAC sectors. But momentum works in both directions so investors need to be aware of the potential risks and rewards.

Future Prospects Look Strong

Despite rising considerably last week, LCID stock remains well below its highs seen earlier this year. Investors are anticipating the arrival of Lucid Air, the company’s first EV model. This is a good time to invest in this company.

Lucid appears strong in luxury EV markets. This could give Lucid a challenge to Tesla in the luxury EV market. Given the specifications that have been revealed so far, a dazzling 520-mile EPA rating for Dream Edition R’s model is an industry record, those seeking performance and range will not find a better choice.

Given the Lucid’s specs, which are far superior to the rest, performance enthusiasts will be forced to check out the Lucid model. Lucid’s forthcoming model launches are among the most eagerly awaited in the EV industry for some time. Investors will see a significant marketing benefit from these performance metrics. Assuming that the market follows the hype, LCID stock may really rise as production increases.

However, there are many execution-related risks that can be associated with delivery and production schedules. We will see how Lucid fare in the months ahead. But it is hard to ignore the energy this stock adds to the EV market.

Bottom Line

Lucid is a company that has raised the bar significantly in terms of performance in the EV sector. LCID stock may be a viable alternative to Tesla for investors searching for a Tesla replacement.

Lucid will need to demonstrate impressive growth numbers to make this stock worth its value. Investors might recall Tesla from ten years back. This stock is worth keeping an eye on in the next quarters. (See LCID stock analysis)

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Chris MacDonald wrote the article. MacDonald had no position at the time this article was published. This content should only be used as an informational tool. Before making any investments, it is important that you do your research.