Lucid Group (NASDAQ: LCID) shares soared 12.3% to close at $2.43 on March 18, hitting an intraday high of $2.48 after opening at $2.18. The spike came amid a surge in trading volume, with over 12.4 million shares changing hands, signaling strong investor interest despite recent turbulence.
Morgan Stanley Upgrade Sparks Rally
The rally was largely driven by Morgan Stanley analyst Adam Jonas, who upgraded Lucid’s rating from “Underweight” to “Equalweight”, maintaining a $3 price target. Jonas cited Lucid’s artificial intelligence (AI) capabilities as a key factor in the improved outlook, suggesting the stock could potentially surge to $10 in an optimistic scenario.
This bullish revision comes after CEO Peter Rawlinson announced his resignation in late February, creating uncertainty around the company’s leadership. Currently, COO Marc Winterhoff serves as interim CEO as Lucid searches for a permanent replacement.
Saudi Arabia: A Strategic Growth Engine
Lucid’s deep ties with Saudi Arabia are also fueling renewed optimism. The Saudi Public Investment Fund (PIF) holds a majority stake in Lucid, providing critical financial backing. The kingdom is also Lucid’s second-largest production hub, positioning the company to benefit from Saudi Arabia’s growing focus on AI and renewable energy investments.
Industry analysts believe Saudi Arabia’s ambitions to become an AI infrastructure leader could unlock significant growth opportunities for Lucid. With its strategic location and access to renewable energy, Saudi Arabia could help Lucid scale its AI-integrated EV technology.
Potential Expansion into China?
Lucid’s Saudi ties may also offer a backdoor entry into China, the world’s largest EV market. As Saudi Arabia strengthens its relationship with China through trade and technology partnerships, Lucid could gain access to this highly competitive but lucrative market. However, it would face stiff competition from established giants like Tesla (TSLA) and BYD (BYDDY).
What’s Next for Lucid?
While Lucid’s recent stock rally reflects growing optimism, the company still faces challenges, including leadership uncertainty, production scalability, and rising competition. However, its AI potential and Saudi-backed expansion could offer compelling long-term growth catalysts.
