Nikola stock soared again today. Buy, Sell or Hold?

Nicola (NKLA 1.84%) The stock surged as much as 14.5% on Tuesday and was back up about 2% as of 1pm ET. That mirrored similar surges and falls for the electric truck maker as it begins main trading on Monday.

Nikola has reported a recent update, but the answer likely lies more in the market in general. The announcement of new tariffs on EV imports from China has sparked activity in the electric vehicle (EV) sector, with trading activity picking up again for meme stocks this week.

Volatile EV stocks

Nikola missed revenue expectations in its most recent earnings report. However, we delivered more hydrogen fuel cell heavy-duty trucks than previously expected. Nikola is also focusing on building infrastructure for the growing fleet of hydrogen trucks. The company is initially focusing on the Southern California port area for fueling stations. A second station opened in the area last week. I believe there is a valid market for these hydrogen Class 8 trucks, and Nikola is jumping at the opportunity to supply them.

Nikola isn’t the only EV sector stock to see volatility this week. And while the just-announced new tariffs on Chinese EV imports are having a direct impact on other U.S.-based EV manufacturing stocks, that’s not the case for heavy-duty truck maker Nikola.

The stock is likely to be caught up in the ongoing meme stock trade, with retail traders focusing on stocks with high short-term interest like Nikola. According to MarketWatch, about 18.5% of Nikola shares were sold short as of early May.

Investors would be wise to avoid the noise of retailers and focus on their individual positions. Although I invest with a long-term perspective, I recognize the risks and allocate my funds to Nikola accordingly. If other investors have lost faith in Nikola, the stock’s surge presents an opportunity to sell risky stocks. Every investor must decide this for himself and hold or sell stocks accordingly.