TLDR
- Lucid stock rose 8.8% after Morgan Stanley upgraded it from Sell to Hold
- Analyst Adam Jonas maintained $3 price target, citing AI potential under new CEO
- Saudi Arabian majority ownership could facilitate AI partnerships
- Lucid shares remain down approximately 28% year-to-date
- Only 18% of analysts covering Lucid have Buy ratings versus 55% average for S&P 500 stocks
Lucid Group (LCID) shares jumped on Tuesday following a Morgan Stanley analyst upgrade, offering a rare bright spot for the luxury electric vehicle maker that has struggled with investor sentiment in 2025.
The company’s stock climbed 8.8% to $2.35 per share on March 18, even as broader markets declined. The S&P 500 dropped 1.1% and the Dow Jones Industrial Average fell 0.6% during the same trading session.
Morgan Stanley analyst Adam Jonas upgraded Lucid from Sell to Hold, maintaining his $3 price target. This represents potential upside of about 28% from Tuesday’s closing price.
The upgrade comes as Lucid faces significant challenges. The stock has fallen approximately 28% year-to-date and has dropped about 51% from its 52-week high set in August 2024.
Investors have grown increasingly concerned about slowing electric vehicle sales growth and rising competition in the EV market. These factors have weighed heavily on Lucid’s stock performance.
Jonas highlighted management changes as a potential catalyst for the company. In February, Lucid named Marc Winterhoff as CEO, replacing founder Peter Rawlinson, who transitioned to a strategic technical advisor role.
The analyst believes new leadership could reinvigorate the company through artificial intelligence initiatives.
“Lucid has the opportunity to execute an AI strategy leveraging strategic/sovereign partnerships within the context of the urgency to develop onshore manufacturing capacity,” Jonas wrote in his report.
Saudi Arabia’s sovereign wealth fund remains Lucid’s majority shareholder. Jonas suggested this relationship could facilitate valuable AI partnerships for the electric vehicle manufacturer.
The most immediate AI application for automakers typically involves advanced driver assistance features. Lucid could potentially leverage such technology to boost vehicle sales in both domestic and international markets.
Most analysts remain cautious
Despite the upgrade, most analysts remain cautious on Lucid stock. Only three of 17 analysts covering the company have Buy ratings, representing just 18% compared to the S&P 500 average of 55%.
The average analyst price target for Lucid shares stands at approximately $2.80. Following the upgrade, about 24% of analysts covering Lucid rate shares as Sell, significantly higher than the S&P 500 average of 5%.
The company has recently launched its new Gravity SUV to complement its Air sedan lineup. Lucid expects to more than double its production year-over-year in 2025.
Lucid’s battery technology remains industry-leading, with its Air Grand Touring sedan offering over 500 miles of range on a single charge. However, the company is not currently known for advanced driver assistance systems or autonomous driving technology.
Jonas believes Lucid is well-positioned to capitalize on AI advancements in these areas, particularly given its relationship with the Saudi Arabian government and its sovereign fund.
It remains to be seen whether Lucid can successfully execute an AI strategy under new management and reverse its stock’s downward trend in the coming months.
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