We recently published a list of 5 EV Winners Of Trump’s Softened Stance On China Tariffs. In this article, we are going to take a look at where Nio Inc. (NYSE:NIO) stands against other EV winners Of Trump’s softened stance on China tariffs.
Donald Trump had a busy first day in office, revoking former President Biden’s executive orders and announcing new measures that continue to send shockwaves through multiple industries. One thing missing from his remarks was tariffs on China, something that was a big part of his election campaign.
Has Trump’s stance on China tariffs softened now? Is this a strategic move to tone down his aggressive stance on China in order to continue business relationships with the Asian country? We believe the President is intentionally taking a softer stance and this sentiment is echoed by Chinese stocks as well. We looked at some Chinese EV stocks that enjoyed a good day of trading in the absence of tariffs on China on Tuesday.
To come up with the list of 5 EV winners of Trump’s softened stance on China tariffs, we only considered stocks with less than a $25 billion market cap.
A fleet of eco-friendly electric cars, a symbol of the company’s commitment to sustainability.
Nio Inc. (NYSE:NIO) was down 4% yesterday, not depicting the same enthusiasm that other Chinese EV stocks did after Trump’s softened stance on tariffs. That’s because the company has a lot more on its plate than just tariffs. The stock is down 30% in a year and the business performance doesn’t inspire much confidence in the short-term, though the company could turn that around.
NIO’s (NYSE:NIO) biggest headache is its shrinking cash position. That is unlikely to improve unless the company innovates to thwart competition from the likes of Tesla and other Chinese EV companies. Even though its cash is at similar levels as Xpeng, it has already burnt through $1.7 billion in the first three quarters of the year.
There are still some positives for investors to look forward to. For example, the recent joint venture with CYVN Holdings targets the North African and Middle Eastern markets. There is also the partnership with Mastercard which enables the company to expand into international markets. We still don’t know the financial impact of these deals but if the management pursues these ambitions successfully, these offer the new growth opportunities that the company needs to stop its decline.
Nio Inc. (NYSE:NIO) is not on our latest list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held NIO at the end of the third quarter which was 20 in the previous quarter.
Overall, NIO ranks first on our list of EV winners Of Trump’s softened stance on China tariffs. While we acknowledge the potential of NIO as a leading AI investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as NIO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.