Is Nikola the New Tesla
Source: Getty Images

Is Nikola the New Tesla? Nikola Stock Skyrockets As Tesla Corrects

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Nikola stock rose 40.8 percent yesterday and closed at $50.05. The stock rose after General Motors acquired an 11 percent stake in the electric vehicle maker. By the end of 2022, GM will engineer and build Nikola’s Badger, a fully electric and hydrogen fuel cell electric pickup truck. The partnership will likely create a major challenge for Tesla. Could Nikola be the new Tesla?

What is Nikola Corporation?

Nikola Corporation is a Phoenix-based zero-emissions-vehicle startup. The company was founded in 2014 by Trevor Milton. Nikola stock, which started trading on June 4 after a reverse merger with VectoIQ, has surged since its IPO despite the fact that the company doesn’t expect to generate sales until 2021. Nikola is planning to launch the Nikola Tre class 8 battery-electric vehicle next year, followed by the Nikola Two class 8 fuel-cell electric semi in 2023.

Nikola versus Tesla

The Nikola-GM partnership is the latest move against Tesla’s growing market dominance. Under the terms of the deal, GM is to engineer and build the Nikola Badger truck, and receive a $2 billion stake in Nikola in return. The Badger is set to take on Tesla's Cybertruck. The Cybertruck is slated to be launched in 2021 at about $30,000 to $70,000, depending on the model. Nikola's Badger will cost consumers between $60,000 and $80,000 when it is released in 2022. 

Is Nikola the New Tesla?
Source: Pixabay

What is Nikola's stock price today?

In premarket trading today, Nikola stock was up about 4.9 percent at $52.49. The stock has risen by 27 percent in the last five days and 390.2 percent in the last year. Nikola stock is trading 46.7 percent below its 52-week high of $93.99 and 387.3 percent above its 52-week low of $10.27. Year-to-date, the stock has risen by 385 percent.

What is Tesla's stock price today?

In premarket trading today, Tesla stock was up about 7.4 percent at $354.61. The stock has fallen by 26.2 percent in the last five days and risen by 568.2 percent in the last year. Tesla stock is trading 34.3 percent below its 52-week high of $502.49 and 656.1 percent above its 52-week low of $43.67. Year-to-date, the stock has risen by 294.7 percent.

Why did Tesla stock fall?

Tesla stock fell 21.1 percent on Sept. 8 and closed at $330.21 with a market capitalization of $307.7 billion. The stock fell after the EV maker was sidelined for inclusion in the S&P 500. Some investors had expected the company would be added to the index after reporting its fourth consecutive quarter of GAAP profitability in July. Instead, the S&P 500 managers added Etsy, Teradyne, and Catalent.

Should I buy Nikola stock?

Currently, analysts' Nikola stock price forecast is $53.75, which suggests a 7.4 percent upside. Their highest target price for Nikola is $79, which implies a 57.8 percent upside, and their lowest target price is $45, which suggests a 10.1 percent downside. Of the five Wall Street analysts who track Nikola, two recommend "buy" and three recommend "hold." None of the analysts recommend selling the stock.

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