KEY POINTS

  • A Wall Street magnate has revealed that he invested in a Chinese electric vehicle company.
  • A Bank of America analyst upgraded the stock to a buy rating.

What’s going on with Nio stock

Monday saw Nio shares bounce after a string of setbacks that drove Nio‘s (NYSE:NIO) stock price sharply down over the previous month. However, some good news has helped spur a modest resurgence for the Chinese electric vehicle (EV) maker. On early Monday morning, Nio’s American depositary shares (ADSs) rose by 7.8%. Since then, they’ve given most of it back, but they’ve still gained 1.7% as of the market close.

Why we care

On Friday, Nio’s prices started to rebound. However, the announcement that a Wall Street behemoth had invested in the firm, an analyst from Bank of America (NYSE:BAC) had upgraded the stock, and that COVID-19 lockdowns in China were apparently loosening caused the share to rise even more on Monday.

According to a Form 13F filing with the SEC on Friday, billionaire investor George Soros has purchased stock in Nio. As of March 31, Soros’ stake in the Chinese EV firm was worth about $84 million. While this isn’t a significant investment for his $6.5 billion investment fund, it is a new holding, representing almost 1.3% of the fund’s value.

Following that news, Bank of America’s Ming Hsun Lee raised his Nio stock recommendation to a buy rating Monday morning. Lee thinks Nio’s valuation is fair now because its share price has decreased significantly, especially compared to what he sees as a coming period of increasing sales. There was an increase in 2022 sales expectations by 3% with the upgrade and 8% for 2023 versus prior forecasts.

What now

While the Chinese government appears to be relaxing some of the tight restrictions it has imposed in major cities to combat a recent COVID-19 outbreak, optimism on Wall Street is growing about Nio. Nevertheless, Nio stock fell by more than 25% due to several headwinds, including production delays caused by the lockdowns. However, this Monday morning, investors were flocking back, taking cues from Soros and BofA, which had bid shares up.

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