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Is NIO Stock a Buy After China Stimulus, Cash Boost & Record Q3 Sales?

After underperforming on the bourses for much of 2024, China's noted electric vehicle player, NIO Inc. (NYSE: NIO), has made a solid comeback in the past month. Shares of NIO have rocketed more than 69% over the past month, handily outperforming the industry, sector and S&P 500. The stock has also surpassed the impressive growth of its closest peers, Li Auto (NASDAQ: LI) and XPeng, during the same period.

One-Month Price Performance Comparison

Image Source: Zacks Investment Research

In fact, in the last six trading sessions alone, NIO has rallied 32%, breaking above its 50- and 200-day moving averages last Tuesday, signifying a bullish trend. Besides the bold stimulus plan unleashed by China's central bank last week, NIO shares have got a significant boost from the recent RMB 3.3 billion ($470 million) cash investment by three investors. Additionally, the excitement surrounding the company's record third-quarter deliveries has contributed to the rally.

Let's take a closer look at these developments and assess the stock's fundamentals to understand if now is the time to initiate new positions in the stock.

NIO Shares Trading Above 50 & 200-Day SMA

Image Source: Zacks Investment Research

NIO Gets a Boost From China's Sweeping Stimulus Bets

To lift the country's ailing economy and stock market, The People's Bank of China announced cuts to the benchmark interest rate and the reserve requirement ratio, along with reductions in mortgage rates for homeowners and loans to investors and companies to buy back their stock. This ...