Lucid Group (NASDAQ: LCID) has defied expectations this week, posting an impressive rally despite its prolonged stock decline and ongoing business struggles. After a sharp downturn in February, LCID shares have climbed 6.59% over the past week, reaching $2.25 as of Wednesday, March 12.
Short Sellers on Edge as Lucid Stock Gains Momentum
Lucid’s short volume ratio has been elevated for weeks, reaching a March high of 71.04% before stabilizing in the 63-69% range, according to data from Fintel. With LCID trading nearly 78% below its IPO price and an astounding 96% off its 2021 peak, short positions had been building in anticipation of further declines.
However, the stock’s unexpected rebound this week has put pressure on bearish traders, increasing the possibility of a short squeeze. If bullish momentum continues, forced covering by short sellers could drive prices even higher in the near term.
What’s Behind the Lucid Stock Rally?
While the broader market has struggled in recent months, Lucid’s stock got a boost from multiple factors:
🔹 Market Rebound: After a brutal sell-off on Monday, March 10, the S&P 500 bounced back, lifting several beaten-down stocks, including LCID.
🔹 CEO Shake-Up: A new CEO announcement in late February has sparked optimism, with Benchmark analyst Mickey Legg reaffirming a ‘buy’ rating and a $5 price target after meeting with the company’s leadership.
🔹 Expansion Plans: Lucid is expected to spend $1.4 billion in 2025 to expand its manufacturing capacity, signaling long-term growth ambitions.
🔹 Tesla’s Market Struggles: Despite expectations that Trump’s pro-oil stance would hurt EV stocks, Tesla’s (NASDAQ: TSLA) recent turmoil has opened opportunities for competitors like Lucid. With backing from Saudi Arabia’s Public Investment Fund (PIF), Lucid has the financial strength to capitalize on shifting EV market dynamics.
Will Lucid’s Comeback Continue?
With heavy short interest, new leadership, and ambitious expansion plans, Lucid’s stock could remain volatile in the coming weeks. If momentum builds, a short squeeze could push prices even higher, making LCID one of the most closely watched EV stocks on Wall Street.
