Why Did Rivian Stock Plunge Today?

Rivian Automotive (NASDAQ: RIVN) stock took a hit today after a second Wall Street analyst advised selling shares of the electric vehicle (EV) maker this week. Shares reacted by dropping nearly 10% at the day's low.

As of 3:21 p.m. ET, Rivian stock remained lower by 7.9%.

Image source: Rivian Automotive.

Expectations too high

Investors have high hopes for Rivian in 2026. As it began production of its next-generation R2 SUV and recently highlighted plans for autonomous driving software, shares soared nearly 50% last year. Today, for the second time this week, a Wall Street analyst has downgraded the stock to a "sell" rating, however.

Last month, the EV maker highlighted plans to expand its artificial intelligence (AI) technology and autonomous driving software. At its Autonomy and AI event on Dec. 11, CEO R.J. Scaringe unveiled the company's inaugural in-house Rivian autonomy processor. Today, however, UBS analyst Joseph Spak said he believes expectations for that technology, as well as sales of its next-generation R2 SUV, are already too high.

Spak lowered his rating on the shares from "neutral" to "sell" with a price target of $15 per share, according to reports. Earlier this week, analysts at Wolfe Research similarly downgraded the stock, noting that any benefits from its self-driving technology are unlikely to materialize until late 2026. That firm's price target is $16 per share.

With fewer near-term AI-related catalysts and high expectations for initial R2 sales, Wall Street seems to think Rivian stock has gotten ahead of itself. Investors interested in holding the stock should recognize that it is a long-term story, but 2026 will play a significant role in how the story unfolds.

Howard Smith has positions in Rivian Automotive. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.