Shares of Chinese electric vehicle maker Nio Inc. (NIO) climbed to a four-month high, extending a rally fueled by a series of Wall Street upgrades and the company's first-ever quarterly profit. The US-listed stock rose nearly 4% on Monday, bringing its five-day gains to 15%.
The rally was triggered by Nio's latest earnings report, which revealed a net profit of 122.4 million yuan ($17.5 million) for ordinary shareholders in Q4 2025. Revenue reached 34.65 billion yuan ($4.95 billion), surpassing analyst estimates. Vehicle deliveries for the quarter hit 124,807 units, a 72% year-over-year increase, with a vehicle margin of 18.1%.
Following the results, several major brokerages upgraded their outlook. HSBC raised its rating to "Buy" from "Hold" and lifted its price target to $6.80 from $4.80, citing improved earnings visibility and confidence in Nio's growth trajectory. Nomura also upgraded to "Buy" with a $6.60 target, noting the company is entering a healthier operating cycle. Bank of America Securities raised its target to $6.70 while maintaining a "Neutral" stance.
Nio's guidance further bolstered sentiment. The company expects Q1 2026 deliveries of 80,000 to 83,000 vehicles, representing nearly 100% year-over-year growth, with projected revenue above consensus estimates. For the full year 2026, management continues to project 40% to 50% delivery growth.
Analysts highlighted Nio's improved cost discipline, with selling, general, and administrative expenses down 15% quarter-over-quarter, and a favorable sales mix led by the ES8 model. However, challenges remain, including potential memory chip shortages that could add costs and headwinds from international expansion into markets like Europe.
