Lucid Stock Plummets: Time to Buy the Dip or Brace for More Pain?

Lucid Motors shares are taking a beating today—but is this EV play a hidden gem or a value trap?

Blood in the streets (and on the ticker)

The luxury EV maker's stock is getting hammered as investor patience wears thin. Production hiccups? Check. Cash burn? You bet. But every crisis creates opportunity—or so the Wall Street gamblers claim.

What the charts won't tell you

Technical analysis won't save you from macroeconomic headwinds or supply chain nightmares. Remember: Tesla didn't moon because of Fibonacci retracements—it had Elon's reality distortion field.

The cynical take

Another 'disruptive' automaker discovering that building cars is hard. Maybe they should pivot to AI blockchain hybrids like everyone else.

Image source: Getty Images.

Is Lucid stock a buy right now?

Lucid stock popped earlier this month after the company announced it had entered into a robotaxi partnership with, but it's now given up much of its initial gains following the news. While the stock is still up roughly 21% over the last month, it's still down 15% across this year's trading.

Reverse stock splits can often create negative valuation pressures for a company's share price, but today's pullback in conjunction with confirmation of an upcoming vote on the split appears to be an overreaction. While Lucid continues to post a large loss on each vehicle that it sells, the company's operations have been supported by funding from its majority stakeholder -- Saudi Arabia's Public Investment Fund (PIF).

With continued support from the PIF, Lucid has a chance of growing its operations to the scale needed to support positive gross margins on vehicle sales. Lucid is a long way from shifting into profitability, and it's a very risky investment, but it has an outside shot of delivering huge returns for investors with very high risk tolerance.