While being called the next Tesla is pretty impressive, considering it is one the greatest, innovative companies of our time, NIO (NYSE: NIO) becoming a meme is not so good.
Yesterday, NIO was the most mentioned stock on Reddit's WallStreetBets, sending the stock up 8% over the past two days. Shares in the Chinese-based company skyrocketed earlier this year after NIO was hyped on social media in a similar fashion. If the meme stock traders give NIO the same love as they gave GameStop and AMC, the stock might be in line for a short squeeze.
However, it's not just a simple meme-stock craze that is pushing the stock up. The stock has gained over 17% so far this week on NIO's Power Day news and the company reporting soaring sales for June. The EV maker might also be benefiting from retail investors growing enthusiastic over Chinese EV manufacturers with NIO standing out because of its ambitious goals.
In June, NIO delivered 8,803, up 116% year-over-year. For the quarter ended in June, the automaker delivered 21,896 EVs, up 112% year-over-year. June deliveries included 2,830 sales of its EC6s model, which competes directly with Tesla's popular Model Y.
NIO is struggling with chip shortages but that hasn't stopped it from delivering a record number of vehicles for the second quarter.
NIO has been busy bringing new EVs to market in its pursuit to catch up to Tesla in the Chinese market. However, the company is also accelerating on other ventures to diversify its income streams.
On July 9, the company will host its 'NIO Power Day' event which is focused on EV batteries and charging. It also added 11 battery swap stations in China, bringing its total to 300. NIO is picking up the pace as it targets 500 battery swap stations in China by the end of the year.
Many consider NIO to be a great long-term investment opportunity as the EV trend isn't going anywhere. Be warned though, if it gets caught up in the meme stock craze, expect NIO's share price to become very volatile.
So always study a company's fundamentals and future potential before investing. To accumulate long-term wealth, you should buy a stock because you believe in the company and not because it is a meme stock.
MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here.
The Home of Successful Investing.
© 2023 MyWallSt Ltd. All rights reserved.