What Happened?
Shares of electric vehicle manufacturer Rivian (NASDAQ: RIVN) fell 9% in the afternoon session after UBS downgraded the electric vehicle maker's stock to 'Sell' from 'Neutral', citing a less favorable risk-to-reward outlook.
The firm expressed concern that market enthusiasm for Rivian's AI and self-driving technology may have already peaked. An analyst with UBS noted that Rivian's free cash flow burn was likely to increase to $4 billion or more due to higher spending. The downgrade also reflected worries about high expectations for the company's upcoming R2 vehicle launch, with UBS forecasting sales for 2026 and 2027 to be significantly below consensus estimates. This negative sentiment was compounded by reports that the company delivered fewer vehicles in 2025 than in the prior year and came as the broader North American EV market showed signs of slowing, with sales declining 4% in 2025 after some incentives were rolled back.
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What Is The Market Telling Us
Rivian’s shares are extremely volatile and have had 32 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 26 days ago when the stock gained 7.2% on the news that it received multiple positive analyst actions, including a significant price target increase from Wedbush.
Wedbush analyst Dan Ives maintained an "Outperform" rating on the electric vehicle maker but raised the price target by over 56% to $25.00, signaling strong confidence. This move followed an upgrade from Baird, which boosted its rating to "Outperform." Baird's optimism was driven by the planned launch of Rivian's lower-priced R2 model, which was expected to broaden the company's customer base and support higher delivery volumes over time.
Rivian is down 11.4% since the beginning of the year, and at $17.20 per share, it is trading 23.4% below its 52-week high of $22.45 from December 2025. Investors who bought $1,000 worth of Rivian’s shares at the IPO in November 2021 would now be looking at an investment worth $170.76.
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