Nio stock price forecast: rating upgrade with a 22% upside

Nio (NYSE: NIO) stock price recovery has stalled at an important resistance level ahead of the upcoming Power Day event. The shares were trading at $10.72 on Wednesday, ~52% above the lowest level this year.

Battery Power Day and Tesla earnings

There are two important catalysts for Nio share price. First, the stock is reacting to the latest Tesla earnings, which we covered here. The results were modestly fine as the company’s revenue jumped. Its revenue soared by 47% YoY to over $24 billion. 

However, the stock retreated after the company narrowed its gross margins because of its price cuts. Gross margin dropped to 18.2% in Q2 from the previous 18.8%. Worse, Tesla warned that it could slash its prices again in a bid to boost market share.

These results are important for other electric vehicle companies because of Tesla’s outsized role in the sector. It is the biggest company in the industry and its price cuts pushed more EVs to slash theirs. The most recent one was Ford, which lowered prices of its Ford Lightning product.

Nio has also slashed prices of its key models in China, meaning that its margins will continue falling as well. Fortunately, China’s EV companies, including Tesla, have pledged against price cuts.

Second, Nio stock price will react to the company’s Battery Power Day event. In it, the company will showcase its battery technology. Like Toyota and QuantumScape, Nio has been working on the solid-state battery technology. It is therefore set to unveil its semi-solid-state battery during the event.

Nio will also focus on the latest power-up layout plan, which includes the 150-kWh battery. Therefore, there is a likelihood that the shares will react to the company’s advancements in the battery technology. 

Nio stock price forecast

The daily chart shows that the Nio share price has been in a slow bullish trend in the past few months. This rally saw the shares jump to the important resistance level at $10.72, the highest point in April.

Most importantly, the stock has formed a rounded bottom pattern while the 50-day and 100-day moving averages are about to make a bullish crossover. Therefore, the outlook for the stock is bullish, with the next level to watch being at $13.23, the highest point on January 24th. This price is about 22% above the current level.