Why Lucid Stock Is Sinking Today

Lucid (NASDAQ: LCID) stock is falling in Monday's trading. The company's share price was down 6.3% as of 3 p.m. ET. At the same point in the day's trading, the S&P 500 (SNPINDEX: ^GSPC) was down 0.3%, and the Nasdaq Composite (NASDAQINDEX: ^IXIC) was down 0.2%.

Despite some potentially good news about a new supercomputing partnership, Lucid is moving lower today due to concerns about tariffs and the long-term implications surrounding the partnership. Investors may also be feeling some jitters heading into the company's first-quarter earnings release tomorrow.

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Lucid stock sells off following Saudi supercomputing team-up

Lucid published a press release today announcing that it had entered into a new partnership with King Abdullah University of Science and Technology (KAUST). Through the team-up with the Saudi Arabian university, the company will be able to utilize KAUST's supercomputing systems -- and the two parties will collaborate on the development of new components and autonomous driving systems.

Saudi Arabia's Public Investment Fund (PIF) is Lucid's majority stakeholder and has been the company's most important financing source. While this relationship has provided the business with regular capital injections, the relationship could pose some issues in light of tariff moves made by the administration of President Donald Trump.

With an announcement over the weekend, the Trump administration announced a 100% tariff on foreign movies. Previous tariffs have been focused on physical goods, but the movie tariff announcement could signal the potential for import taxes on non-physical products or foreign-originated designs.

What's next for Lucid?

Lucid is scheduled to publish its first-quarter results after the market closes tomorrow. In the Q1 update it published at the beginning of April, the company said it had produced 2,212 vehicles in the quarter and sent an additional 600 vehicles to Saudi Arabia for final assembly. Meanwhile, the business delivered 3,109 vehicles in the period.

Following a net loss for shareholders of $636.9 million in last year's fourth quarter, Lucid will likely post another big net loss with its Q1 report. While the bottom-line results will play a significant role in the stock's near-term performance, investors will also be looking at the company's forward targets and guidance on tariff impacts.

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Keith Noonan 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.