Will Nio stock reach a $100 billion market cap again?

Nio Inc (NYSE: NIO) is catching the attention of investors as it reports a promising second quarter.

The electric vehicle (EV) maker has shown a significant improvement with a 16.7% year-on-year decline in net loss and revenues surpassing expectations.

Nio’s stock surged from $4.24 to $4.80 following the announcement of quarterly deliveries hitting 57,373 vehicles, well above the company’s guidance.

This positive momentum raises the question: will Nio stock hit a $100 billion market cap?

Onvo brand may be beneficial for Nio share price

One of the key drivers behind this bullish sentiment is Nio’s new Onvo L60, which is expected to compete directly with Tesla’s Model Y in the Chinese market.

Scheduled to start deliveries by the end of September, the Onvo L60 is priced around $30,000, making it more affordable compared to the Model Y, which costs approximately $34,000 in China.

This competitive pricing, combined with a battery leasing option, positions the L60 as a strong contender in the world’s largest auto market.

Nio’s strategy to launch the Onvo brand—focusing on family-friendly, mass-market vehicles—could be a significant catalyst for its stock price.

The company plans to open over 100 Onvo stores soon, aiming to capitalize on this momentum and improve its financial outlook.

By shifting from a luxury-focused lineup to more affordable models, Nio is expected to better absorb fixed costs and enhance its profit margins.

Moreover, Nio’s revenue forecast for the current quarter has been revised upward to RMB 19.669 billion ($2.71 billion), exceeding analysts’ predictions of RMB 18.129 billion.

This optimistic outlook suggests that recent share price declines may be more reflective of broader market negativity toward China rather than specific issues within the company.

Should you buy Nio stock in September?

While Nio faces challenges such as tariffs and is not expected to turn a profit before 2027, Citi analyst Jeff Chung advises buying the stock at its current levels.

He forecasts an upside potential to $7.00, indicating nearly a 50% gain from its present value.

Chung is particularly bullish because Nio’s stock is trading at a discount compared to its rival Xpeng (NYSE: XPEV). Currently, Nio is valued at 0.6 times its expected sales for 2025, while Xpeng is valued at 0.9 times.

Chung anticipates that the valuation gap will narrow as Nio ramps up its affordable model offerings and invests in autonomous driving technologies.

He has also increased his earnings per share (EPS) estimates for Nio for 2024-2026 in a recent research note.

The consensus rating for Nio stock remains “overweight,” reflecting overall positive sentiment among analysts.

While reaching a $100 billion market cap like Nio did in early 2021 may seem distant, investing in Nio today could position investors for significant gains over the next 12 months, driven by its new product launches and strategic shifts.