Autopilot introduction will push Tesla rival Tesla's stock up - Baird

Baird analyst Ben Kallo upgraded his outlook on shares of electric car maker Rivian Automotive from Neutral to Outperform and raised his target price from $14 to $25, CNBC reports. That's up nearly 42% from the closing price on Dec. 17.

Rivian, according to Kallo, retains significant growth potential as it prepares to launch a new AI-enabled electric vehicle next year. "The new model will expand Rivian's lineup by entering a more affordable segment (around $45k), which will significantly increase the overall potential market," the analyst wrote in a note to clients cited by CNBC.

Rivian plans to release a more affordable mid-size electric SUV, the R2, in mid-2026. The new model will use custom chips instead of Nvidia processors to run artificial intelligence, lidar and proprietary software. This approach will help attract new buyers, the company believes.

"At the recent Autonomy and AI Day event, Rivian unveiled its own chips and revealed more details about its strategy for implementing autonomous driving - we see this as positive for strengthening the company's competitive position in the long term," said Kallo.

Baird's assessment is at odds with Wall Street's: according to MarketWatch, of the 27 analysts tracking Rivian securities, only eight recommend buying them, 14 advise holding them in a portfolio, and five recommend selling them. The Wall Street consensus price target is $16.2, down 8% from the closing price of Wednesday, December 17.

Rivian shares rose 5.2% to $18.5 on Thursday, December 18 after Baird published a note. Since the beginning of the year the securities have grown by 40.5%.

Rivian went public in 2021. The company was perceived as a potential competitor to Tesla, ahead of older automakers in launching full-size electric pickup trucks and SUVs, Bloomberg pointed out.

This article was AI-translated and verified by a human editor