What's going on with Rivian stock (RIVN)? – Rivian Automotive (NASDAQ:RIVN)

Rivian Automotive Inc RIVN Shares traded 7.5% lower at $12.17 on Friday. The stock is trading lower as major indexes retreat following recent strength.

What happened this week: The The Federal Reserve unexpected decision on Wednesday to cut interest rates by 50 basis points at the September meeting Federal Open Market Committee (FOMC) At the meeting, Rivian shares and the markets overall posted strong gains on Thursday.

The rate cut will bring the benchmark interest rate down to a range of 4.75 to 5 percent. It is the first cut in over four years and signals a more aggressive monetary easing cycle than previously expected.

This change in course has significant implications for Rivian, a leading electric vehicle (EV) manufacturer, and its investors, who now have reason to be more optimistic about the company's financial outlook and growth potential.

Also read: Rivian unveils $100,000 Tri-Max variant of R1S electric SUV

What else: Despite its potential and strong brand in the electric vehicle market, Rivian is still in the growth phase and has yet to turn a profit. While the Fed's rate cut is lowering borrowing costs, investors have likely reassessed the company's significant cash burn and longer path to profitability.

Even with lower interest rates, Rivian still faces high capital expenditures related to expanding production, improving the supply chain and research and development, particularly in the competitive electric vehicle space.

The Federal Reserve Summary of economic forecasts resulted in upward revisions to unemployment rates up to 2025, which suggests a possible future economic weakness.

Investors may fear that slowing economic growth could dampen consumer demand for higher-priced luxury electric vehicles like Rivian's. R1T Truck and R1S SUV, which counteracts sales growth despite favorable financing conditions.

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Is RIVN a good stock to buy?

Given the coverage over the past three months, Wall Street analysts view Rivian Automotive as an outperform overall. Colin Langan of Wells Fargo is the optimist on Rivian Automotive and expects the stock to rise 80.0% in the coming year.

However, when looking at how the market as a whole feels about the stock, one can judge whether investors hold strong convictions one way or the other by looking at its historical price performance. Over the past three months, Rivian Automotive has risen 19.48%, suggesting that opinion about the company has improved and how attractive it is to own based on either its share price or underlying fundamentals such as revenue, which is up 3.3% over the last year.

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RIVN has a 52-week high of $24.87 and a 52-week low of $8.26.