Why Shares of Nio Stock Soared 21% This Week
Key Points
Nio's deliveries are soaring because of a hit new SUV.
The company generated positive net income for the first time ever.
It operates in a hypercompetitive electric vehicle market in China.
- 10 stocks we like better than Nio ›
Shares of Nio (NYSE: NIO) have soared 21.3% this week, according to data from S&P Global Market Intelligence. An electric vehicle (EV) maker in China, Nio produced strong delivery growth in Q4 2025 and is finally generating a profit. The stock remains down over 90% from all-time highs.
Here's why Nio stock was soaring this week, and whether it belongs in your portfolio today.
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Accelerating demand
In Q4 2025, Nio's revenue growth began to accelerate. Revenue grew 76% year over year to just under $5 billion, while the company finally generated a net profit of $40 million in the period. The company's new ES8 is driving volume growth, which is a larger SUV with a higher average selling price and better margins.
Total deliveries were approximately 125,000 in Q4, up from 73,000 in the same period a year prior. Guidance calls for more growth in Q1, with expectations of 80,000 to 83,000 deliveries, which would be close to double the previous year's volume.
After years in the doldrums, Nio finally has products that are helping it scale and generate profits.
Image source: Getty Images.
Should you buy Nio stock?
Even after this stock bump, Nio is still down significantly from its all-time highs set during the 2021 stock market EV craze. Its deliveries are growing as it targets the ginormous automotive market in China.
However, investors should be cautious when buying a stock in a foreign country that is economically more difficult to understand. The automotive sector in China remains hypercompetitive, with frequent price wars. For Nio, right now is its time to shine. But in the future, another EV competitor could start to undercut it.
For this reason, Nio stock is one to avoid, despite the company posting its first-quarter profitability. Selling cars is simply a hard business.
Should you buy stock in Nio right now?
Before you buy stock in Nio, consider this:
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Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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