Rivian CEO RJ Scaringe on the firm’s first “Autonomy and AI Day” on Dec. 11, 2025, in Palo Alto, California.
Lora Kolodny | CNBC
Rivian Automotive impressed Wall Avenue on Thursday with its plans for synthetic intelligence, automation and an internally developed silicon chip, however vital challenges involving demand and capital stay for the electrical car maker.
Regardless of Wall Avenue analysts expressing some optimism following Rivian’s first “Autonomy and AI Day,” the corporate’s inventory fell 6.1% to shut Thursday at $16.43 per share. However shares recovered throughout intraday buying and selling Friday and have been up greater than 12%.
Whereas the occasion did not trigger many analysts to vary rankings or worth targets, Needham raised its worth goal on Rivian by 64% to $23 per share. The agency did so on the tech bulletins and potential for future licensing offers, in addition to higher-than-consensus expectations on deliveries subsequent 12 months of the corporate’s new midsize R2 SUV.
“RIVN signaled a shift from an [automaker] adopting autonomy to 1 leveraging AI to construct end-to-end autonomy,” Needham analyst Chris Pierce mentioned in a Friday investor observe.
The corporate’s inventory had ramped up heading into the AI Day, however many analysts believed the bulletins from the occasion have been already “priced in.” Shares additionally fell as OpenAI made its personal AI announcement Thursday, revealing its most superior mannequin but.
“We attended Rivian’s Autonomy & AI Day yesterday in Palo Alto and got here away largely impressed with the strategic path outlined by administration,” Deutsche Financial institution analyst Edison Yu mentioned Friday in an investor observe. “Nevertheless, the inventory’s weak spot appears warranted given the run-up since earnings and lack of a serious AI partnership/deal announcement.”
Rivian’s bulletins included a proprietary chip, RAP1, designed for “bodily AI,” specifically autonomous driving; an developed software program structure, or “brains” of the car; a brand new AI assistant; and a highway map for attending to “private L4,” or totally self-driving personally owned automobiles.
The latter begins later this month with an replace involving its hands-free driving system, adopted by plans to proceed to broaden capabilities till automobiles attain full autonomy within the years forward. Rivian didn’t disclose a timeframe for the complete autonomy or potential robotaxi fleet autonomous automobiles.
Main as much as the occasion, Rivian shares have been up greater than 30% to $17.50. Regardless of these good points, shares stay nicely off the degrees of the corporate’s IPO of $78 per share in 2021.
Barclays analyst Dan Levy and others mentioned whereas Rivian’s know-how bulletins, together with the shock proprietary chip, have been spectacular, the corporate stays a “present me” story amid more difficult market circumstances.
“With RIVN dealing with a harder path to breakeven on core car gross sales alone, we consider with enhanced AV/AI capabilities RIVN is additional paving the trail to further software program/service revenues, which might be margin accretive,” Levy mentioned Friday in an investor observe. “To be clear, there may be definitely a ‘present me’ aspect for RIVN on its capabilities.”
Challenges embody slumping EV demand following the top of as much as $7,500 tax credit in September, lack of different assist below the Trump administration and inside struggles on the firm involving merchandise and capital.
A number of analysts famous the adoption of superior driver help programs stays low throughout the business, even at U.S. EV chief Tesla, and Rivian is constant to play catch-up to different firms which have provided such programs for years.
Shares of “pure EV” performs Tesla, Rivian and Lucid in 2025.
Rivian founder and CEO RJ Scaringe and different executives argued that the corporate’s vertical integration of in-house capabilities together with software program, AI, car platforms and different applied sciences will allow the automaker to be extra environment friendly, faster and higher than others.
“AI is enabling us to create know-how and buyer experiences at a price that’s fully totally different from what we have seen prior to now,” Scaringe mentioned in the course of the occasion.
Such arguments, in addition to the automaker’s prior $5.8 billion three way partnership software program cope with Volkswagen, have led Wall Avenue to cost Rivian’s software program enterprise larger than its core of manufacturing and promoting EVs, given market circumstances.
A $12 worth goal for Rivian shares from Morgan Stanley, which just lately downgraded the corporate to underweight, consists of $7 for software program and providers and $5 for its core automotive enterprise. A number of analysts added that Rivian would possibly have the ability to license or promote its latest applied sciences, together with chips.
“RIVN is growing a collection of {hardware} and software program choices to stay aggressive in an Auto 2.0 world. Nevertheless, a number of dangers stay round demand, doubtlessly limiting information seize wanted to achieve larger ranges of autonomy,” Morgan Stanley’s Andrew Percoco mentioned in a Friday observe.
Morgan Stanley raised issues about autonomy adoption charges, lackluster EV demand forward of Rivian’s new “R2” car subsequent 12 months and a chronic path to profitability as reasoning for the score affirmation.
Rivian R2 is showcased on the firm’s first Autonomy and AI Day showcasing developments in self-driving know-how, in Palo Alto, California, Dec. 11, 2025.
Carlos Barria | Reuters
RBC Capital Markets analyst Tom Narayan agreed: “The developments improve Rivian’s product providing however don’t handle ongoing issues round liquidity and R2/R3 profitability.”
Rivian continues to lose billions of {dollars} yearly, regardless of vital value reductions and good points in software program income because of its cope with VW.
Rivian ended the third quarter with $7.7 billion in whole liquidity, together with almost $7.1 billion in money, money equivalents and short-term investments that Scaringe has mentioned place the corporate “very well” for the R2 launch.
The R2 midsize SUV is essential for Rivian — particularly since it is a main market within the U.S. With expectations of a $45,000 beginning worth, it’s anticipated to broaden Rivian’s buyer base and be a proof-point for the corporate’s efforts concerning profitability and value financial savings.
Rivian’s present R1 pickup truck and SUV shopper fashions begin at greater than $70,000. It additionally builds electrical supply vans, largely for its largest shareholder, Amazon, that begin at round $80,000.
“Profitability stress will seemingly intensify as Rivian rolls out its ~$45K R2 platform within the extremely aggressive mid-size SUV phase,” Narayan mentioned. “Whereas concentrating on a cheaper price level might improve market attain, the R1 platform’s struggles with profitability regardless of being almost double the worth of the R2 increase.”
Shares of Rivian, with a $22.5 billion market cap, are rated maintain with a $15.43 per share worth goal, in response to common rankings and estimates compiled by FactSet.
— CNBC’s Michael Bloom contributed to this report.
