Nio stock extends gains after Wall Street upgrades and profit surprise

Shares of Chinese electric vehicle maker Nio Inc. climbed to a four-month high as Wall Street upgrades and strong financial results strengthened the company’s growth outlook.

US-listed shares of Nio rose nearly 4% on Monday extending its 5 day gains to 15%.

The stock gained following the release of its first quarterly profit report in the previous week.

The recent rally comes as analysts grow more optimistic about the company’s delivery growth, profitability trajectory, and product pipeline heading into 2026.

Wall Street upgrades boost Nio outlook

Several brokerages upgraded the stock or raised price targets following Nio’s latest earnings report.

HSBC upgraded Nio to “Buy” from “Hold” and raised its price target to $6.8 from $4.8.

The bank cited improving earnings visibility and said it has “stronger conviction” in the company’s growth trajectory.

HSBC added that new models and expansion of the company’s core portfolio, particularly the ES8, could support delivery growth, improve product mix and drive margin expansion.

The firm also pointed to strong order momentum across Nio’s lineup as a factor that could support future volumes.

Nomura also upgraded Nio to “Buy” from “Neutral” with a $6.6 price target.

The brokerage said the company’s business and financial performance have improved over the past two quarters and that Nio appears to be entering a healthier operating cycle.

While Nomura lowered shipment forecasts for 2026 and 2027, it still expects about 25% compound annual growth in shipments between 2025 and 2028.

Meanwhile, Bank of America Securities raised its price target to $6.7 from $6.3 while maintaining a “Neutral” rating.

The firm noted Nio’s strong model pipeline and operating expense discipline but cautioned that sector headwinds remain.

These headwinds include lower EV purchase subsidies and cost inflation expected in 2026.

First quarterly profit marks key milestone

Nio’s share rally was also fueled by its latest financial results, which marked the company’s first profitable quarter.

The company reported revenue of 34.65 billion yuan ($4.95 billion), exceeding analyst estimates of 33.25 billion yuan.

Adjusted earnings came in at 0.29 yuan per share, well above the 0.05 yuan consensus estimate.

Vehicle deliveries reached 124,807 units in the fourth quarter, representing a 72% increase year over year.

For the full year, deliveries rose 47% to 326,028 vehicles, while total revenue increased 33.1% to 87.49 billion yuan.

The company’s guidance also contributed to the positive sentiment.

Nio expects first-quarter deliveries of 80,000 to 83,000 vehicles, representing 90% to 97% year-over-year growth.

Revenue for the quarter is projected to range between 24.48 billion yuan and 25.18 billion yuan, above the 23.3 billion yuan consensus estimate.

Expansion and model pipeline support growth narrative

Nio’s recent momentum has also been supported by its expanding product lineup and international growth strategy.

The company has seen success with newer models and plans to launch additional vehicles this year, which could help boost sales volumes.

Management continues to project 40% to 50% delivery growth in 2026, despite challenges across China’s broader automotive industry.

The EV maker is also pursuing international expansion as it seeks to increase sales outside China.

Industry developments could further support demand for battery-electric vehicles.

While sales of plug-in hybrids have slowed in China, battery-electric vehicle penetration continues to rise, which could benefit companies such as Nio that exclusively produce BEVs.

At the same time, Nio is investing in semiconductor development through its chip subsidiary Shenji, which is developing its second chip and exploring potential third-party customers.

The effort aligns with China’s broader push to strengthen domestic semiconductor capabilities while reducing reliance on imported chips.