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Why Lucid Stock Suddenly Popped Today

What happened

The stock of electric-vehicle (EV) start-up Lucid Group (NASDAQ: LCID) suddenly jumped in afternoon trading today, apparently responding to a rumor that Apple (NASDAQ: AAPL) might tap it to build the tech company's own long-awaited EV.

At the close on Friday, Lucid stock was up almost 2%. Apple stock, in contrast, had barely budged.

Image source: Getty Images.

So what

Those divergent trends in stock price might be instructive because, if you ask me, the rumor that Apple will hire Lucid to build its EV is pure bunk.

It first emerged this morning on automotive news site TorqueNews.com in an article coated in caveats:

  • Lucid "could potentially" build a car for Apple.
  • But both companies "declined to comment" on the rumor.
  • But if Lucid does win the job, its stock "would skyrocket."

You get the gist. When you come right down to it, this is an exercise in navel-gazing by Lucid fans, with very little to back it up, and I expect any gains its stock gets from the rumor will be fleeting.

Now what

Why is that? For one thing, most of the rumors so far about which company Apple might partner with have not mentioned Lucid at all. A quick Google search on the topic reveals suggestions that Apple might partner with Foxconn, its longtime collaborator on iPhones and iPads; or with Magna International, a popular contract manufacturer of cars for other makers, or even with South Korean companies LG or Kia. But previous mentions of Lucid seem entirely absent.

No surprise there. So far, the most relevant Apple-Lucid news we've seen on reputable websites was a report from MotorAuthority.com expressing amazement that Lucid's first Air electric sedan will appear "without Apple CarPlay" aboard! That hardly seems like the beginning of a beautiful friendship. Indeed, as recently as March of this year, Lucid CEO Peter Rawlinson was still talking about Apple as a potential competitor -- not a collaborator -- telling CNBC, "I welcome the competition from a company like Apple."

I think Apple hiring Lucid to build it an EV is a pipe dream for Lucid investors, and today's stock price bump will not last long.

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool owns and recommends Apple. The Motley Fool recommends Magna Int’l and recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.


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