Earnings Activities on NIO and GameStop : Review & Winners Announcement

I have confidence in NIO. The only reason I'm not buying is because of the sad state of global affairs we brought upon ourselves. Now, NIO has been a highly suppressed stock and will pump if this bear market ever ends.

NIO has established healthy growth as shown in their MRQ earnings. Since they missed on eps, I had to look deeper. NIO, like everyone else, is facing challenges. Overall macro conditions affects all reaches, but also not a good phase for the industry. EVs have yet to be fully accepted, and people aren't much for hype right now. Specifically, the last report showed they were hit hard on costs obviously, leading to an unfavorable eps. Considering that the company was gouged on material costs, via batteries and rising costs of lithium + shipping and logistics, I think that's out of their control because it's global issue. Better management wouldn't be able to manage lower costs in these times or in a country that's shutdown. Other costs went into research and development and marketing the new es7. So they have growth, new products, they are reinvesting in their future, all while dealing with sitting at the crossroads of the hardest hit industries i.e. auto & tech. Don't forget misplaced sentiment, misunderstood earnings, and the toughest of economic times on a global scale holding them back. Once this company hits some favorable conditions, I expects to see some great returns.

Personally I think there is actually something contradicting that founder of NIO, Li mentioned about. Nvidia chip is indeed the current core of the element of the business, which isn’t replaceable in a short period of time. US restriction in regards to that chip delivering to China is having a large impact on NIO and Li mentioned that it won’t impact the long term, meaning that in the short term, they can’t recover from it in yet. At the current stage, AI development in training chip is the long term plan and NIO is under the process of evaluating companies in China which could be potential partners. Even if NIO found it, there is a chip compatibility issue, which will take time to adjust. Thus, personally, I’m expecting a further drop in stock for the short term. Currently people are holding onto NIO stock (which makes the market look stable) but the question is for how long are they willing to hold onto it? Compatible chip is not an easy task, it might even be a tech which could only be replicated by Nvidia. Li mentioned that NIO might work closely with Nvidia to solve that issue but will Nvidia willing to spill out the tech? Thus, the time needed for a compatible chip would be an issue and people would have given up hope before it’s a success. However it is not to say that NIO won’t make a comeback. It has a large potential for the long term. The major enemy for them is just ‘Time’ .

Indeed every EV stock is highly speculative. It can be very challenging to know how to invest securely in the Chinese stocks like NIO. We all understand that NIO stocks may offer huge growth opportunity in a massive market. Nevertheless, it takes guts and a strong appetite for risks as it tends to be highly volatile with greater regulatory pressures, global chips shortage and an increased price hike for materials costs. Still on a positive note, I believe that with a long term view, NIO stocks are attractive buys to hold long term when prices dip. Reasons being that this company is a strong powerhouse with respectable financials, growth rate and a wide moat.