Why Rivian stock fell early today

rivian cars (RIVN 1.12%) The stock price is falling due to the announcement of another company’s electric vehicle (EV) yesterday. Rivian shares fell more than 5% in morning trading Wednesday.

The reason is the tech titans. apologize It announced that it would end a 10-year project to develop its own electric vehicle. Some investors saw this as another sign that demand for EVs might not be as strong as initially thought. But Rivian stock has recovered from today’s early decline, and for good reason. As of 10:30 a.m. ET, Rivian shares were up slightly by 0.2%.

Is Rivian a good fit for Apple?

This recovery may have something to do with something widely respected technology analyst Gene Munster said in a CNBC interview late yesterday. Munster, managing partner at Deepwater Asset Management, said he was shocked that Apple had halted its EV project. Discussing the move, Munster said Apple still needs to do something big and “potentially Rivian is the answer to that.”

The soft EV demand environment has been causing a lot of anxiety among investors in EV startups like Rivian. Rivian shares have fallen nearly 30% over the past month.

Rivian expects to produce only 57,000 vehicles this year. This is roughly the same as in 2023 and lower than the 66,000 expected by analysts. Some are wondering whether Rivian will have enough cash on hand until the next-generation R2 platform launches in 2026.

Of course, Munster was just speculating about what Apple might do in the future. The company said the majority of its EV project workforce will shift to developing artificial intelligence (AI) technology. However, AI has begun to be used in various fields, including manufacturing.

Apple may consider bringing existing EV manufacturers into its fold. But investors shouldn’t buy Rivian based on speculation from Munster. The real question is whether the demand environment for electric vehicles will strengthen.