Updated Lucid stock forecast for 2024 as shares soar on new PIF investment

investing.com:

Following a disappointing year-to-date performance, Lucid (NASDAQ:LCID) stock received a much-needed boost at the Monday market open after a major positive development for the luxury electric vehicle (EV) manufacturer. 

LCID shares were up more than 9.2% at the time of writing, trading at $3.02 apiece.

The rally in Lucid stock came after the luxury EV maker announced a $1 billion capital infusion from an affiliate of Saudi Arabia’s Public Investment Fund (PIF). The announcement sparked an early trading surge in the company’s shares by nearly 20% before paring some gains. 

This move underlines Lucid's strategic advantage to survive in the challenging EV sector. The Saudi Kingdom, holding a 60% stake in Lucid through the PIF, continues to channel billions into the company as part of its broader initiative to diversify its economy away from oil.

The investment will be made through the purchase of convertible preferred stock by Ayar Third Investment Company, a PIF affiliate, detailed in a filing with the U.S. securities regulator. This arrangement allows for the conversion into approximately 280 million shares. 

Facing headwinds like below-expected demand, the California-based Lucid aims to allocate the fresh funds for various corporate needs and capital expenditures. 

Last month, the automaker said in its Q4 financial presentation that it has enough liquidity «at least until 2025,» with plans to invest $1.5 billion in 2024 and the anticipated launch of its Gravity SUV later this year.

In response to the announcement, analysts on Wall Street voiced their initial reactions on how the fresh capital infusion could affect Lucid stock.

In particular, Morgan Stanley analysts said the PIF’s investment was slightly lower than