Nio Stock Falls to Key Support Level Despite Strong Delivery and Revenue Growth
NIO NIO | 0.00 | |
LI Auto LI | 0.00 | |
XPENG INC. XPEV | 0.00 |
NIO (NYSE:NIO) stock has continued to slide, entering a local bear market after falling nearly 30% from its May peak. The shares are now trading near their lowest level since March, even as the company continues to report strong growth in vehicle deliveries.
Nio Stock Has Slipped as Investors Sell Chinese EV Shares
Nio, a top Chinese electric vehicle manufacturer, has come under pressure in the past few months. This retreat started in April when it peaked at $7, its highest level since November last year.
The sell-off has mirrored the performance of other Chinese EV stocks. XPeng (NYSE:XPEV) has plunged 53% from its 2025 high and is trading at its lowest level since January last year. Li Auto (NASDAQ:LI) has fallen to $13.20, down 72% from its all-time high. Meanwhile, BYD shares have declined by 50% and are now hovering near their 2024 lows.
Nio stock has dropped despite its vehicle deliveries being in a strong upward trend, helped by its ET9, ES9, and Onvo L80. The most recent results showed that its deliveries jumped by 62.3% in May to 37,705. Its deliveries rose by 68.7% to 150,526 this year.
This growth has led to a surge in its revenue. Its most recent results showed that its revenue jumped by 129% to $3.3 billion, while its vehicle gross margin rose to 19% from 7.6% in the same period last year.
The only blemish in the report was that it made a net loss of $48.1 million, a big reversal after it made a net profit in the previous quarter. The management expects its business to make consistent profits in the coming quarters.
Nio’s revenue growth is expected to be steady this year, with analysts predicting a 56% annual increase to $20 billion, followed by $22 billion next year.
Nio Shares Have Hit a Crucial Support Level
The weekly chart shows that the Nio stock price has slumped in the past few weeks. It has slumped to a crucial support level that coincides with the ascending trendline that connects the lowest points in April and July last year, and March this year.
Nio has moved slightly below the 50-week moving average. Most notably, the Relative Strength Index (RSI) has just crossed the neutral point of 50 and is pointing downwards, a sign that it has more downside to go.
Therefore, a drop below the ascending trendline points to more downside, potentially to the support of $3, its lowest level this year.
Image: Shutterstock