Nikola’s (NKLA) stock has retreated more than 40% in price over the past year and is currently trading near its 52-week low. Recently, the company reported difficulties due to high inflation and supply chain bottlenecks. The recently enacted infrastructure act in the U.S. should boost the company’s operations. But, COVID-19 could pose a serious threat to the company’s operations. It is difficult to see how the dip could be profitable given its current high valuation. Continue reading for our opinion. The technology integrator and innovator Nikola Corporation (NKLA) is based in Phoenix, Arizona. It develops transportation and energy solutions in America. NKLA shares have slumped 46.1% in price over the past year and 35.3% year-to-date to close yesterday’s trading session at $9.88. The stock currently trades at $9.88, below both its 50-day- and 200-day moving mean and close to its 52-week lowest since August 16.

Company is facing cost pressures and supply chain disruptions. Clean trucks are currently more expensive than diesel cars due to inflation and supply-chain bottlenecks. Nikola CEO Mark Russell complained that it was a bad time for costs to rise. Rising prices have been a major headwind to a startup that is losing money like NKLA. The company also faces fierce competition from other well-capitalized truck producers and newcomers. In August, NKLA reduced its outlook financial for the year.

Investors’ anxiety has increased due to the recently discovered omicron COVID-19 variation. The CEO of Moderna Inc. (NASDAQ) expressed concern about the efficacy of vaccines currently in use. Furthermore, if lockdowns are reinstated, it could severely hinder NKLA’s growth trajectory. The stock’s price has fallen 5.5% over the last five days.

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