Lucid Stock Is Gaining Steam, And Retail Traders Are Loving It: Analyst Sees 'Emerging AI Bull Case'

Morgan Stanley also pointed to Lucid's in-house EV platform, proprietary powertrain, and battery tech as potential value drivers.

Shares of Lucid Group Inc. have gained nearly 3.5% over the past three sessions and already notched their best winning streak in a month.

Tuesday's surge came despite a broader market downturn, as investor jitters intensified ahead of the Federal Reserve's interest rate decision, a potential catalyst for market direction.

Lucid's stock got a boost from a Wall Street note citing the EV maker's potential to become an "emerging AI bull case."

On Monday, Morgan Stanley analysts led by Adam Jonas upgraded the company's shares to 'Equal Weight' from 'Underweight,' saying that Lucid, under new leadership, "has the potential to bring forth an executable AI strategy via partnerships."

"We see emerging scope for Lucid's ability to play a role in the embodied AI theme as a reshored/'friend-shored' manufacturer with access to capital and strategic relationships that uniquely position Lucid to straddle geopolitical hurdles in potentially partnering with both China and the West," the research firm said.

Amid Trump’s tariff war, Morgan Stanley outlined how Lucid could be well-positioned to benefit. 

The analysts said China’s expertise in large-scale manufacturing could aid U.S. EV makers struggling with profitability. They highlighted reports of deepening diplomatic and economic ties between Beijing and Saudi Arabia and believe Lucid could play a key role in fostering better Sino-American auto relations.

Lucid shares have remained under pressure since CEO Peter Rawlinson's unexpected decision to step down last month, adding to concerns about the struggling EV maker's future. 

However, investors have found some optimism in the company's recent quarterly earnings beat and its ambitious goal of increasing 2025 deliveries by 120%.

On Stocktwits, sentiment for Lucid has improved significantly, flipping from 'bearish' to 'bullish' within a week amid an 86% surge in message volume.

Several retail investors are now betting that the Newark, California-based company could emerge as a serious challenger to Tesla's dominance, especially as Elon Musk's firm faces uncertainty with his increased involvement in Washington under President Donald Trump's administration.

One optimistic watcher called Lucid "the best alternative for Tesla haters" and listed growing attention for its newly launched Gravity SUV and improved marketing focus among several upsides.

Another said: "If this hits 10$ this week, I will buy a Lucid."

Morgan Stanley also pointed to Lucid's in-house EV platform, proprietary powertrain, and battery tech as potential value drivers, especially through partnerships with other automakers. The company already has a battery technology licensing deal with Aston Martin.

Lucid stock is down 2.7% this year but has gained more than 43% over the past 12 months.

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