NIO Stock Jumps on $1 Billion Capital Raise as JPMorgan Keeps Overweight Rating

TLDR

Table of Contents

NIO stock surged 5.99% in Hong Kong and 4.34% in U.S. markets, breaking key resistance levels
J.P. Morgan maintained Overweight rating with $8 price target after the company’s $1 billion capital raise
The equity offering will issue 181.8 million shares at $5.57 each, creating 8-9% dilution
Analysts expect NIO to reach positive free cash flow by Q4 2025 with improving margins
Upcoming catalysts include NIO Day on September 20 and the Guangzhou Auto Show in November

NIO stock delivered its strongest performance in weeks, posting gains across both trading venues. The Chinese EV maker climbed 5.99% to HK$51.00 in Hong Kong while adding 4.34% to $6.49 in U.S. markets.

The dual-market strength comes despite investor concerns over the company’s recent $1 billion equity offering. NIO announced plans to issue 181.8 million Class A ordinary shares at $5.57 each on September 10.

The pricing represents a 2.6% discount to the closing price on that date. Once completed, the transaction will create 8-9% equity dilution for existing shareholders.

Trading volumes supported the move higher. Hong Kong saw HK$252.66 million in volume with a healthy 1.02 volume ratio, showing institutional participation.

The technical picture is turning favorable. In U.S. markets, NIO finally broke above stubborn resistance levels, with key moving averages around $6.40-$6.48 now providing support.

The RSI hit 60.7, leaving room for further gains before overbought conditions emerge. Hong Kong shares bounced from recent lows near HK$48.12, giving bulls reasons for optimism.

J.P. Morgan Backs the Capital Raise

J.P. Morgan analyst Nick Lai maintained his Overweight rating and $8 price target despite the equity offering. Lai believes the fundraising serves a good purpose in China’s competitive EV market.

“Fund raising should help the company in an extremely competitive EV market in China,” Lai stated. He noted the timing was somewhat surprising given management’s recent Q2 results presentation.

The company held RMB 27 billion in cash and equivalents by June’s end. Lai estimates cash burn narrowed to about RMB 2 billion in Q2 2025, with free cash flow turning positive expected by Q4.

Management targets Q4 non-GAAP operating profit breakeven, driven by volume growth and margin improvements. Street forecasts have improved from a RMB 1.9 billion Q4 loss estimate to roughly RMB 1.1 billion.

J.P. Morgan’s own Q4 loss estimate sits at RMB 500 million. Lai believes earnings revision risk tilts to the upside.

Key Catalysts on the Horizon

NIO Day on September 20 will reveal final pricing for the ES8 premium SUV after strong pre-order response. The event could provide positive momentum for shares.

Heading to the All-New ES8 launch, our Hefei factory is ramping up shipments.🚗 The deliveries will kick off upon launch at NIO Day 2025, September 20th. Let's Jiadian!⚡#NIO #ES8 #BlueSkyComing pic.twitter.com/3AkDU9OrwM

— William Li (@WilliamLiNIO) September 15, 2025

The Guangzhou Auto Show in November presents another catalyst. NIO may unveil the Onvo L80, a five-seater SUV positioned as a high-volume model.

Upcoming launches under both NIO and Onvo brands should drive sales growth. Lai projects 488,000 unit sales in FY26, up from 323,000 this year.

The company plans to use offering proceeds for R&D of core smart EV technologies and future vehicle models. Funds will also support battery swapping network expansion and general corporate purposes.

Policy tailwinds from Beijing’s fresh EV adoption incentives are providing sector support. Money is flowing back into growth stories as risk appetite returns.

The Street consensus remains Moderate Buy with 6 Buy ratings, 5 Holds, and 1 Sell. The average price target of $6.16 suggests shares are currently fairly valued.

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