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Lucid Shares Stabilize As EV Maker Navigates Between Rate Cuts And Bearish Analysts

MarketDash Editorial Team
1 day ago
Lucid Group stock is treading water Friday after a volatile week, caught between the Fed's rate cut tailwind and Morgan Stanley's warning of an approaching "EV Winter" that could force a massive dilutive capital raise by 2026.

Lucid Group Inc. (LCID) is having one of those weeks where everything happens and nothing changes. Shares are trading slightly higher Friday morning, essentially flat for the week after bouncing back from a midweek selloff. The luxury EV maker finds itself in an interesting spot: good news on one side, grim forecasts on the other.

Rate Cuts Offer a Lifeline

The recent momentum stems from Wednesday's Federal Reserve decision to trim interest rates by 0.25%, pushing the target range down to 3.5%–3.75%. Sure, the Fed signaled patience heading into 2026, but cheaper borrowing costs matter when you're a capital-hungry growth company burning through cash. For Lucid, which depends heavily on external funding to keep the lights on, that's a small win.

Morgan Stanley Sees An "EV Winter" Coming

But here's the problem: any optimism from the rate cut is getting squashed by a harsh reality check from Morgan Stanley. Earlier this week, analyst Andrew Percoco downgraded the stock to Underweight and slashed the price target to $10. His thesis? An "EV Winter" is coming in 2026.

The numbers aren't pretty. Morgan Stanley projects Lucid won't hit gross profit breakeven until 2028. Worse, the firm estimates the company will need to raise roughly $2 billion in equity by the second half of 2026 just to keep operations funded. That kind of capital raise would significantly dilute existing shareholders—not exactly the kind of news that inspires confidence.

A Short Squeeze Setup?

Despite the bearish outlook, there's a technical wrinkle keeping things interesting. Lucid currently leads the market with a staggering 52.7% short interest, making it the most heavily shorted stock among major equities. That creates a battleground dynamic: bears are piling on, but any positive catalyst could trigger a squeeze that sends the stock surging as shorts scramble to cover.

Technical indicators paint a mixed picture. The stock carries a Momentum score of 7.34, but Price Trends are flagged as negative across short, medium, and long-term timeframes.

The Trading Picture

Lucid Group shares were up 0.78% at $12.93 Friday. Support appears to be forming around the recent low of $12.73, which could provide a floor if selling pressure returns. On the upside, resistance sits near $13.21, the recent intraday high. A breakout above that level could open the door for further gains, while a breakdown below support might invite more sellers to the party.

For now, Lucid remains stuck in neutral—helped by Fed policy, hurt by analyst downgrades, and watched closely by a market split between pessimists and opportunists looking for fireworks.

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Lucid Shares Stabilize As EV Maker Navigates Between Rate Cuts And Bearish Analysts

MarketDash Editorial Team
1 day ago
Lucid Group stock is treading water Friday after a volatile week, caught between the Fed's rate cut tailwind and Morgan Stanley's warning of an approaching "EV Winter" that could force a massive dilutive capital raise by 2026.

Lucid Group Inc. (LCID) is having one of those weeks where everything happens and nothing changes. Shares are trading slightly higher Friday morning, essentially flat for the week after bouncing back from a midweek selloff. The luxury EV maker finds itself in an interesting spot: good news on one side, grim forecasts on the other.

Rate Cuts Offer a Lifeline

The recent momentum stems from Wednesday's Federal Reserve decision to trim interest rates by 0.25%, pushing the target range down to 3.5%–3.75%. Sure, the Fed signaled patience heading into 2026, but cheaper borrowing costs matter when you're a capital-hungry growth company burning through cash. For Lucid, which depends heavily on external funding to keep the lights on, that's a small win.

Morgan Stanley Sees An "EV Winter" Coming

But here's the problem: any optimism from the rate cut is getting squashed by a harsh reality check from Morgan Stanley. Earlier this week, analyst Andrew Percoco downgraded the stock to Underweight and slashed the price target to $10. His thesis? An "EV Winter" is coming in 2026.

The numbers aren't pretty. Morgan Stanley projects Lucid won't hit gross profit breakeven until 2028. Worse, the firm estimates the company will need to raise roughly $2 billion in equity by the second half of 2026 just to keep operations funded. That kind of capital raise would significantly dilute existing shareholders—not exactly the kind of news that inspires confidence.

A Short Squeeze Setup?

Despite the bearish outlook, there's a technical wrinkle keeping things interesting. Lucid currently leads the market with a staggering 52.7% short interest, making it the most heavily shorted stock among major equities. That creates a battleground dynamic: bears are piling on, but any positive catalyst could trigger a squeeze that sends the stock surging as shorts scramble to cover.

Technical indicators paint a mixed picture. The stock carries a Momentum score of 7.34, but Price Trends are flagged as negative across short, medium, and long-term timeframes.

The Trading Picture

Lucid Group shares were up 0.78% at $12.93 Friday. Support appears to be forming around the recent low of $12.73, which could provide a floor if selling pressure returns. On the upside, resistance sits near $13.21, the recent intraday high. A breakout above that level could open the door for further gains, while a breakdown below support might invite more sellers to the party.

For now, Lucid remains stuck in neutral—helped by Fed policy, hurt by analyst downgrades, and watched closely by a market split between pessimists and opportunists looking for fireworks.